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National Endowment for the Arts
Valuing the Art of Industrial DesignA Profile of the Sector and Its Importance to Manufacturing Technology and Innovation
Bonnie Nichols NEA Office of Research amp Analysis
Front cover photos courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
A flared white basket in a loose cross-hatched pattern glazed earthenware circa 1915
GRiD Compass laptop computer prototype designed by Bill Moggridge 1981
Cubo chair designed by Vladimir Kagan 1976
Silver Streak iron model 1038 designed by Corning Glass Works 1942ndash46
National Endowment for the Arts Research Report 56
Valuing the Art of Industrial DesignA Profile of the Sector and Its Importance to Manufacturing Technology and Innovation
Bonnie Nichols NEA Office of Research amp Analysis
August 2013
Research Report 56
August 2013
National Endowment for the Arts 1100 Pennsylvania Avenue NW Washington DC 20506 Telephone 202-682-5400
artsgov
Produced by the Office of Research amp Analysis
Sunil Iyengar Director
Bonnie Nichols Research Analyst
Other staff contributors Steven Shewfelt Tamika Shingler Melissa Menzer and Ellen Grantham
Editorial assistance by Don Ball
Designed by RomanThayer Design Inc
For their valuable assistance while this report was in production the NEA Office of Research amp Analysis would like to thank the following people Mariana Amatullo (Art Center College of Design) Mike Gallagher (Crown Equipment Corporation) Jim Hirabayashi (US Patent amp Trademark Office) Daniel Martinage (Industrial Designers Society of America) Emma Presler (Museum of Modern Art) Beth Siegel (Mt Auburn Associates) and Harry West and Kevin Young (Continuum)
Library of Congress Cataloging-in-Publication Data
Nichols Bonnie Valuing the art of industrial design a profile of the sector and its importance to manufacturing technology and innovation Bonnie Nichols pages cm -- (Research report 56) June 2013 Includes bibliographical references 1 Industrial designers--Salaries etc--United States--Statistics 2 Industrial design--Economic aspects--United States--Statistics I National Endowment for the Arts II Title TS23N53 2013 7452--dc23 2013028449
202-682-5496 VoiceTTY (a device for individuals who are deaf or hearing-impaired)
Individuals who do not use conventional print materials may contact the Arts Endowmentrsquos Office for AccessAbility at 202-682-5532 to obtain this publication in an alternate format
This publication is available free of charge in print or PDF format at artsgov the website of the National Endowment for the Arts
Table of Contents
4 Preface
7 Introduction
8 Executive Summary
12 Part 1 Industrial Design as an Occupation
24 Part 2 Industrial Design as a Business
36 Part 3 Industrial Design as a Product Innovator
46 Conclusion The NEA and Industrial Design
48 Appendix
49 References
4 | Preface
Preface Design is a field with a large and extensive presence in our nationrsquos manufacturing and services industries as documented by the national datasets that provide the basis for this report Designers are prolifically inventing new products processes and systems that have a profound impact on our economy and civil society
The National Endowment for the Arts (NEA) Design Program has been tracking numerous trends in the field of design from the growing movement of design thinking to social impact design Although this report brings together for the first time analytical perspectives regarding federal data on industrial design it cannot be all-encompassing This preface has benefited from conversations with some of the nationrsquos leading designers design curators and design firms to convey information not captured by the report itself
An Expanding Definition for Industrial Design Much of the data in this report are drawn from the US Bureau of Labor Statistics (BLS) The Occupational Handbook Outlook from the BLS defines industrial designers as ldquothose individuals that develop the concepts for manufactured products such as cars home appliances and toysrdquo While this dataset enables a quantitative grasp of the industry BLSrsquo definition is arguably limited in scope Todayrsquos industrial designers find themselves in a variety of roles and functions beyond the development of manufactured products
Industrial designers are working on projects for a variety of organizations from government entities to private enterprises Using a creative lens for approaching complex problems or challenges (often referred to as the design process) designers are engaged by a range of clients to bring a fresh approach to age-old issues Industrial designers are not just designing commercial products but designing user experiences processes and systems by applying the creative approach of what has been come to be known as ldquodesign thinkingrdquo The idea to utilize the design process as a way to analyze and innovate has been widely embracedmdashfrom business schools to major consulting practicesmdashand has changed the landscape of how industrial designers work
For example an industrial designer might not only design a high-tech medical device for a hospital but also the patientrsquos interactive experience and touch points with medical staff in the emergency room Similarly industrial designers might work with retail merchandisers to reorganize store floor plans and re-imagine the in-store experience for potential customers Design thinking requires industrial designers to work on diverse teams to solve these more complex challenges In a typical firm a team might include an engineer design strategist marketer and anthropologist as well as software designers and developers as products become more intelligent and responsive to media inputs
Valuing the Art of Industrial Design | 5
Historically industrial design has been a field of invention driven by market demand or clients Today there are many examples of designers pursuing clientless endeavors some have even been on display at the Museum of Modern Art in New York These artists probably would self-identify as industrial designers their contributions to developing clientless work as an art form is an acknowledged practice but one not quantifiable from the datasets explored in this report
Furthermore industrial designers are applying their skills to projects that achieve a broader social impact for populations that cannot afford to hire a designer directly1 For example Design that Matters is a 501(c)(3) nonprofit that ldquocreates new products that allow social enterprises in developing countries to offer improved services and scale more quicklyrdquo2 Design that Matters works with industrial designers manufacturers and other nongovernmental organizations to develop scalable products that serve low-resource communities around the globe Winner of the 2012 National Design Award for Corporate amp Institutional Achievement Design that Matters is developing product innovations within the nonprofit sector for significant impact One such innovation is an affordable phototherapy device to treat jaundiced newborns in South Asian and Sub-Saharan Africa
Postsecondary educational programs are retooling their curricula to reflect these more fluid approaches to industrial design Bachelorrsquos and masterrsquos programs in industrial design reflect the interdisciplinary nature of industrial design work Course curriculums at leading design institutions include anthropology systems design and entrepreneurship in addition to the traditional manufacturing and design studio course requirements Universities are also developing hybrid programs that apply design thinking to business and other fields of practice Professionals trained in these postsecondary programs might find themselves working for a company where their creative skills are engaged and applied to client-driven work or systems improvement The cross-disciplinary training and expanded professional role of industrial design thus make it difficult to assess the field conclusively by examining federal datasets alone
Designers as Inventors This research report sheds light on the significant role that designers play in invention of new products and services Creativity often begets innovation and invention According to data from the US Patent and Trademark Office approximately 40 percent of inventors named on design patents were also named on utility patents In contrast among all inventors named on utility patents only 2 percent were named on design patents
1 In 2012 the National Endowment for the Arts Smithsonianrsquos Cooper-Hewitt National Design Museum and Lemelson Foundation released a white paper ldquoDesign and Social Impactrdquo httpwwwneagovpubDesign-and-Social-Impactpdf
2 httpwwwdesignthatmattersorg
6 | Preface
These data demonstrate that designers are not only crafting new or improved visual ornamental designs for productsmdashthey are simultaneously inventing the new and useful products and processes themselves While this report quantifies the number of design patents obtained annually it can be challenging to identify the design firm or individual responsible for crafting a new product design Most often patents are assigned to the manufacturer or client company that commissions the design work While industrial designers may be the ones inventing new products their work is typically client-driven with the client organization becoming the patent assignee Nevertheless there is no doubt that designers play a crucial role in driving the creative process that results in new inventions or ornamental designs
Designers are also pursuing their creative process and new product designs through entrepreneurial ventures While most of the data here account for industrial design establishments and industrial designers on payroll many designers innovate products outside a formal business establishment In 2011 $92 million was pledged on Kickstarter to support design projects and 319 successful projects were funded3 Since their launch in 2009 4424 design projects have been launched on Kickstarter with a request for $877 million4 Browsing the posted projects in the design category reveals that the majority of proposals are for product design New funding platforms such as Kickstarter have enabled entrepreneurial designers to obtain capital to explore conceptual ideas and realize new inventions
Ultimately design is a tool to inspire innovation and influence systems change Industrial designers are creative professionals who are doing just that While we are unable to capture all the facets of the industrial design field in this research report we acknowledge the breadth of the field and the ever-expanding role of industrial designers as creative professionals who spark innovation commercial products and positive change The NEA report begins to quantify the role of industrial designers in the US economy and should provoke a more sustained and comprehensive inquiry about the importance of industrial design as a field
Jason Schupbach Director of DesignJennifer Hughes Design Specialist National Endowment for the Arts
3 httpwwwkickstartercomblog2011-the-stats
4 httpwwwkickstartercomhelpstats (Data retrieved June 25 2013)
Valuing the Art of Industrial Design | 7
Introduction For nearly four decades the National Endowment for the Arts has used federally collected data to portray the demographic and financial characteristics of artists as workers Designers have always been a vital segment of that population accounting for nearly 40 percent (about 830000) of all artists the largest share for any single artist occupation The category is broad and it includes fashion floral graphic interior and set designers as well as merchandise displayers It also includes commercial and industrial designers the subject of this report
The NEA has not previously attempted to provide in-depth information about the subgroups of occupations that make up the design field But the availability of such data from the US Bureau of Labor Statisticsmdashspecifically through a collaboration with state workforce agenciesmdashmakes a detailed rendering possible When it comes to understanding designers in the context of the industries that employ them moreover another federal statistical agency can be consulted the US Census Bureau
By using a combination of occupational and industry statistics this report enumerates industrial designers as workers the sectors that hire them the earnings of industrial designers and firms and the states and metropolitan areas where industrial design workers and industries are most prevalent
Why do we seek a baseline understanding of industrial design as a field Part of the answer lies in the reward of creating new knowledge As much research demonstrates artists as a whole show great fluidity when it comes to standard categories of employment They typically rely upon multiple jobs a combination of part-time and full-time work and they move with ease across the for-profit and nonprofit sectors Their portfolio careers while rich and diverse can prove difficult to track consistently for a clear picture of artistsrsquo contributions to the US economy
With industrial design as perhaps with design more generally a further challenge besets cultural researchers Industrial design is the handmaiden to a wide range of commercial industries To appreciate the full impact of industrial design workers and their businesses it is not enough to view this cohort in isolation One must trace the relationship of design to product manufacturing and to architectural and engineering firms and a host of other service industries This exercise is especially worthy at a time when a growing segment of the American public wants to know exactly where the arts can be found in manufacturing technology and product innovation
As for innovation this report uses a third federal data sourcemdashthe US Patent and Trademark Officemdashto represent designers as inventors The report thus addresses a specific ldquonoderdquo on the system map that accompanies the NEArsquos five-year research agenda set forth in the publication How Art Works (2011)5 That research topic is titled ldquoSocietal Capacities to Innovate and to Express Ideasrdquo The present analysis of the industrial design field allows us better to quantify this elusive component of the US arts ecosystem
Sunil Iyengar Director of Research amp Analysis National Endowment for the Arts
5 httpwwwneagovresearchHow-Art-Works
8 | Executive Summary
Executive Summary
Section One Industrial Design as an OccupationIndustrial designers also known as commercial designers develop the concepts for a variety of manufactured projects Most findings in this section come from data collected by the US Bureau of Labor Statistics
1) There are more than 40000 industrial designers in the United Statesn Thirty percent or approximately 12000 industrial designers are
self-employed This share is comparable to that for all artists (34 percent) but more than four times greater than the self-employment rate of all US workers (7 percent)
n Among salaried workers industrial designers number less than graphic designers (191440) merchandise-display designers (73490) floral designers (47110) and interior designers (40750)mdashbut they earn more than most design workers6
2) Most salaried industrial designers fall into one of two sectors manufacturing (11730 workers) or professional scientific and technical services (7570 workers)n Transportation equipment manufacturing (makers of auto and aerospace
parts and vehicles) is one of the best-paying industries for industrial designers The industry employs about 20 percent of all industrial designers in manufacturing
n The professional services sector includes a range of industries Among those retaining industrial designers on staff are specialized design firms (3990 industrial designers) engineering and architectural firms (2510) management scientific and technical consulting firms (380) and scientific RampD firms (300)
3) Michigan Rhode Island Wisconsin Indiana and Pennsylvania are the top five states by percentage of industrial designers in the workforcen Four out of the top five metropolitan areas by concentration of industrial
designers in the workforce are in Michigan Topping the list is the exceptionmdashKokomo Indiana also an automotive manufacturing site
n California and Michigan each employ more than 3000 industrial designers Both states host major hubs of auto design (eg the GM Technical Center in Warren Michigan and the BMW Design Works and the Volvo Monitoring and Concept Center in Ventura County California)
n Industrial designers in Michigan earn an average salary of $69870 a year or $10000 more than the national average for this occupation Industrial designers in Silicon Valley are also among the nationrsquos best-paid industrial designers
6 Architects and landscape architects fall into a different occupational category than designers so are excluded from this comparison
Valuing the Art of Industrial Design | 9
4) Over the next several years a growing number of industrial designers will find work in the professional services sector (eg engineering firms and specialized design firms)n Industrial designer employment in this sector is projected to leap by 29
percent
n Manufacturers will continue to employ the greatest share of salaried industrial designers Yet projected declines in manufacturing employment overall will trim the number of industrial designers in this sector
n Continued growth is projected for overall employment of industrial designers though the growth rate (+105 percent from 2010 to 2020) is somewhat lower than for all occupations as a whole (+143 percent)
Section Two Industrial Design as a BusinessAs an industry industrial design refers to business establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of manufactured products Most findings in this section come from data collected by the US Census Bureau
1) There are 1579 industrial design business establishments in the US with a total annual payroll of approximately $14 billionn In 2007 the most recent year for which such data are available industrial
design firms earned more than $15 billion in total revenue About 94 percent came from sales of product design model design and fabrication and other industrial design services
n Other revenue came from clothing and graphic design and drafting and other specialized services among other sources
n Roughly 14 percent (218) of all industrial design firms earned about $113 million by exporting their services The sales accounted for roughly one-fourth of these firmsrsquo total revenue ($468 million)
2) Total revenues earned by the industrial design industry are highly concentrated among the largest firmsn The four largest industrial design firms generate 11 percent of the industryrsquos
total revenue the 20 largest 32 percent and the 50 largest 45 percent7
n By contrast the professional services sector as a wholemdashof which industrial design is a partmdashrelies far less on larger firms The 50 largest firms in the sector generate only 18 percent of its total revenue
7 Although the US Census Bureau is barred from reporting data on individual establishments industry news reports suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Front cover photos courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
A flared white basket in a loose cross-hatched pattern glazed earthenware circa 1915
GRiD Compass laptop computer prototype designed by Bill Moggridge 1981
Cubo chair designed by Vladimir Kagan 1976
Silver Streak iron model 1038 designed by Corning Glass Works 1942ndash46
National Endowment for the Arts Research Report 56
Valuing the Art of Industrial DesignA Profile of the Sector and Its Importance to Manufacturing Technology and Innovation
Bonnie Nichols NEA Office of Research amp Analysis
August 2013
Research Report 56
August 2013
National Endowment for the Arts 1100 Pennsylvania Avenue NW Washington DC 20506 Telephone 202-682-5400
artsgov
Produced by the Office of Research amp Analysis
Sunil Iyengar Director
Bonnie Nichols Research Analyst
Other staff contributors Steven Shewfelt Tamika Shingler Melissa Menzer and Ellen Grantham
Editorial assistance by Don Ball
Designed by RomanThayer Design Inc
For their valuable assistance while this report was in production the NEA Office of Research amp Analysis would like to thank the following people Mariana Amatullo (Art Center College of Design) Mike Gallagher (Crown Equipment Corporation) Jim Hirabayashi (US Patent amp Trademark Office) Daniel Martinage (Industrial Designers Society of America) Emma Presler (Museum of Modern Art) Beth Siegel (Mt Auburn Associates) and Harry West and Kevin Young (Continuum)
Library of Congress Cataloging-in-Publication Data
Nichols Bonnie Valuing the art of industrial design a profile of the sector and its importance to manufacturing technology and innovation Bonnie Nichols pages cm -- (Research report 56) June 2013 Includes bibliographical references 1 Industrial designers--Salaries etc--United States--Statistics 2 Industrial design--Economic aspects--United States--Statistics I National Endowment for the Arts II Title TS23N53 2013 7452--dc23 2013028449
202-682-5496 VoiceTTY (a device for individuals who are deaf or hearing-impaired)
Individuals who do not use conventional print materials may contact the Arts Endowmentrsquos Office for AccessAbility at 202-682-5532 to obtain this publication in an alternate format
This publication is available free of charge in print or PDF format at artsgov the website of the National Endowment for the Arts
Table of Contents
4 Preface
7 Introduction
8 Executive Summary
12 Part 1 Industrial Design as an Occupation
24 Part 2 Industrial Design as a Business
36 Part 3 Industrial Design as a Product Innovator
46 Conclusion The NEA and Industrial Design
48 Appendix
49 References
4 | Preface
Preface Design is a field with a large and extensive presence in our nationrsquos manufacturing and services industries as documented by the national datasets that provide the basis for this report Designers are prolifically inventing new products processes and systems that have a profound impact on our economy and civil society
The National Endowment for the Arts (NEA) Design Program has been tracking numerous trends in the field of design from the growing movement of design thinking to social impact design Although this report brings together for the first time analytical perspectives regarding federal data on industrial design it cannot be all-encompassing This preface has benefited from conversations with some of the nationrsquos leading designers design curators and design firms to convey information not captured by the report itself
An Expanding Definition for Industrial Design Much of the data in this report are drawn from the US Bureau of Labor Statistics (BLS) The Occupational Handbook Outlook from the BLS defines industrial designers as ldquothose individuals that develop the concepts for manufactured products such as cars home appliances and toysrdquo While this dataset enables a quantitative grasp of the industry BLSrsquo definition is arguably limited in scope Todayrsquos industrial designers find themselves in a variety of roles and functions beyond the development of manufactured products
Industrial designers are working on projects for a variety of organizations from government entities to private enterprises Using a creative lens for approaching complex problems or challenges (often referred to as the design process) designers are engaged by a range of clients to bring a fresh approach to age-old issues Industrial designers are not just designing commercial products but designing user experiences processes and systems by applying the creative approach of what has been come to be known as ldquodesign thinkingrdquo The idea to utilize the design process as a way to analyze and innovate has been widely embracedmdashfrom business schools to major consulting practicesmdashand has changed the landscape of how industrial designers work
For example an industrial designer might not only design a high-tech medical device for a hospital but also the patientrsquos interactive experience and touch points with medical staff in the emergency room Similarly industrial designers might work with retail merchandisers to reorganize store floor plans and re-imagine the in-store experience for potential customers Design thinking requires industrial designers to work on diverse teams to solve these more complex challenges In a typical firm a team might include an engineer design strategist marketer and anthropologist as well as software designers and developers as products become more intelligent and responsive to media inputs
Valuing the Art of Industrial Design | 5
Historically industrial design has been a field of invention driven by market demand or clients Today there are many examples of designers pursuing clientless endeavors some have even been on display at the Museum of Modern Art in New York These artists probably would self-identify as industrial designers their contributions to developing clientless work as an art form is an acknowledged practice but one not quantifiable from the datasets explored in this report
Furthermore industrial designers are applying their skills to projects that achieve a broader social impact for populations that cannot afford to hire a designer directly1 For example Design that Matters is a 501(c)(3) nonprofit that ldquocreates new products that allow social enterprises in developing countries to offer improved services and scale more quicklyrdquo2 Design that Matters works with industrial designers manufacturers and other nongovernmental organizations to develop scalable products that serve low-resource communities around the globe Winner of the 2012 National Design Award for Corporate amp Institutional Achievement Design that Matters is developing product innovations within the nonprofit sector for significant impact One such innovation is an affordable phototherapy device to treat jaundiced newborns in South Asian and Sub-Saharan Africa
Postsecondary educational programs are retooling their curricula to reflect these more fluid approaches to industrial design Bachelorrsquos and masterrsquos programs in industrial design reflect the interdisciplinary nature of industrial design work Course curriculums at leading design institutions include anthropology systems design and entrepreneurship in addition to the traditional manufacturing and design studio course requirements Universities are also developing hybrid programs that apply design thinking to business and other fields of practice Professionals trained in these postsecondary programs might find themselves working for a company where their creative skills are engaged and applied to client-driven work or systems improvement The cross-disciplinary training and expanded professional role of industrial design thus make it difficult to assess the field conclusively by examining federal datasets alone
Designers as Inventors This research report sheds light on the significant role that designers play in invention of new products and services Creativity often begets innovation and invention According to data from the US Patent and Trademark Office approximately 40 percent of inventors named on design patents were also named on utility patents In contrast among all inventors named on utility patents only 2 percent were named on design patents
1 In 2012 the National Endowment for the Arts Smithsonianrsquos Cooper-Hewitt National Design Museum and Lemelson Foundation released a white paper ldquoDesign and Social Impactrdquo httpwwwneagovpubDesign-and-Social-Impactpdf
2 httpwwwdesignthatmattersorg
6 | Preface
These data demonstrate that designers are not only crafting new or improved visual ornamental designs for productsmdashthey are simultaneously inventing the new and useful products and processes themselves While this report quantifies the number of design patents obtained annually it can be challenging to identify the design firm or individual responsible for crafting a new product design Most often patents are assigned to the manufacturer or client company that commissions the design work While industrial designers may be the ones inventing new products their work is typically client-driven with the client organization becoming the patent assignee Nevertheless there is no doubt that designers play a crucial role in driving the creative process that results in new inventions or ornamental designs
Designers are also pursuing their creative process and new product designs through entrepreneurial ventures While most of the data here account for industrial design establishments and industrial designers on payroll many designers innovate products outside a formal business establishment In 2011 $92 million was pledged on Kickstarter to support design projects and 319 successful projects were funded3 Since their launch in 2009 4424 design projects have been launched on Kickstarter with a request for $877 million4 Browsing the posted projects in the design category reveals that the majority of proposals are for product design New funding platforms such as Kickstarter have enabled entrepreneurial designers to obtain capital to explore conceptual ideas and realize new inventions
Ultimately design is a tool to inspire innovation and influence systems change Industrial designers are creative professionals who are doing just that While we are unable to capture all the facets of the industrial design field in this research report we acknowledge the breadth of the field and the ever-expanding role of industrial designers as creative professionals who spark innovation commercial products and positive change The NEA report begins to quantify the role of industrial designers in the US economy and should provoke a more sustained and comprehensive inquiry about the importance of industrial design as a field
Jason Schupbach Director of DesignJennifer Hughes Design Specialist National Endowment for the Arts
3 httpwwwkickstartercomblog2011-the-stats
4 httpwwwkickstartercomhelpstats (Data retrieved June 25 2013)
Valuing the Art of Industrial Design | 7
Introduction For nearly four decades the National Endowment for the Arts has used federally collected data to portray the demographic and financial characteristics of artists as workers Designers have always been a vital segment of that population accounting for nearly 40 percent (about 830000) of all artists the largest share for any single artist occupation The category is broad and it includes fashion floral graphic interior and set designers as well as merchandise displayers It also includes commercial and industrial designers the subject of this report
The NEA has not previously attempted to provide in-depth information about the subgroups of occupations that make up the design field But the availability of such data from the US Bureau of Labor Statisticsmdashspecifically through a collaboration with state workforce agenciesmdashmakes a detailed rendering possible When it comes to understanding designers in the context of the industries that employ them moreover another federal statistical agency can be consulted the US Census Bureau
By using a combination of occupational and industry statistics this report enumerates industrial designers as workers the sectors that hire them the earnings of industrial designers and firms and the states and metropolitan areas where industrial design workers and industries are most prevalent
Why do we seek a baseline understanding of industrial design as a field Part of the answer lies in the reward of creating new knowledge As much research demonstrates artists as a whole show great fluidity when it comes to standard categories of employment They typically rely upon multiple jobs a combination of part-time and full-time work and they move with ease across the for-profit and nonprofit sectors Their portfolio careers while rich and diverse can prove difficult to track consistently for a clear picture of artistsrsquo contributions to the US economy
With industrial design as perhaps with design more generally a further challenge besets cultural researchers Industrial design is the handmaiden to a wide range of commercial industries To appreciate the full impact of industrial design workers and their businesses it is not enough to view this cohort in isolation One must trace the relationship of design to product manufacturing and to architectural and engineering firms and a host of other service industries This exercise is especially worthy at a time when a growing segment of the American public wants to know exactly where the arts can be found in manufacturing technology and product innovation
As for innovation this report uses a third federal data sourcemdashthe US Patent and Trademark Officemdashto represent designers as inventors The report thus addresses a specific ldquonoderdquo on the system map that accompanies the NEArsquos five-year research agenda set forth in the publication How Art Works (2011)5 That research topic is titled ldquoSocietal Capacities to Innovate and to Express Ideasrdquo The present analysis of the industrial design field allows us better to quantify this elusive component of the US arts ecosystem
Sunil Iyengar Director of Research amp Analysis National Endowment for the Arts
5 httpwwwneagovresearchHow-Art-Works
8 | Executive Summary
Executive Summary
Section One Industrial Design as an OccupationIndustrial designers also known as commercial designers develop the concepts for a variety of manufactured projects Most findings in this section come from data collected by the US Bureau of Labor Statistics
1) There are more than 40000 industrial designers in the United Statesn Thirty percent or approximately 12000 industrial designers are
self-employed This share is comparable to that for all artists (34 percent) but more than four times greater than the self-employment rate of all US workers (7 percent)
n Among salaried workers industrial designers number less than graphic designers (191440) merchandise-display designers (73490) floral designers (47110) and interior designers (40750)mdashbut they earn more than most design workers6
2) Most salaried industrial designers fall into one of two sectors manufacturing (11730 workers) or professional scientific and technical services (7570 workers)n Transportation equipment manufacturing (makers of auto and aerospace
parts and vehicles) is one of the best-paying industries for industrial designers The industry employs about 20 percent of all industrial designers in manufacturing
n The professional services sector includes a range of industries Among those retaining industrial designers on staff are specialized design firms (3990 industrial designers) engineering and architectural firms (2510) management scientific and technical consulting firms (380) and scientific RampD firms (300)
3) Michigan Rhode Island Wisconsin Indiana and Pennsylvania are the top five states by percentage of industrial designers in the workforcen Four out of the top five metropolitan areas by concentration of industrial
designers in the workforce are in Michigan Topping the list is the exceptionmdashKokomo Indiana also an automotive manufacturing site
n California and Michigan each employ more than 3000 industrial designers Both states host major hubs of auto design (eg the GM Technical Center in Warren Michigan and the BMW Design Works and the Volvo Monitoring and Concept Center in Ventura County California)
n Industrial designers in Michigan earn an average salary of $69870 a year or $10000 more than the national average for this occupation Industrial designers in Silicon Valley are also among the nationrsquos best-paid industrial designers
6 Architects and landscape architects fall into a different occupational category than designers so are excluded from this comparison
Valuing the Art of Industrial Design | 9
4) Over the next several years a growing number of industrial designers will find work in the professional services sector (eg engineering firms and specialized design firms)n Industrial designer employment in this sector is projected to leap by 29
percent
n Manufacturers will continue to employ the greatest share of salaried industrial designers Yet projected declines in manufacturing employment overall will trim the number of industrial designers in this sector
n Continued growth is projected for overall employment of industrial designers though the growth rate (+105 percent from 2010 to 2020) is somewhat lower than for all occupations as a whole (+143 percent)
Section Two Industrial Design as a BusinessAs an industry industrial design refers to business establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of manufactured products Most findings in this section come from data collected by the US Census Bureau
1) There are 1579 industrial design business establishments in the US with a total annual payroll of approximately $14 billionn In 2007 the most recent year for which such data are available industrial
design firms earned more than $15 billion in total revenue About 94 percent came from sales of product design model design and fabrication and other industrial design services
n Other revenue came from clothing and graphic design and drafting and other specialized services among other sources
n Roughly 14 percent (218) of all industrial design firms earned about $113 million by exporting their services The sales accounted for roughly one-fourth of these firmsrsquo total revenue ($468 million)
2) Total revenues earned by the industrial design industry are highly concentrated among the largest firmsn The four largest industrial design firms generate 11 percent of the industryrsquos
total revenue the 20 largest 32 percent and the 50 largest 45 percent7
n By contrast the professional services sector as a wholemdashof which industrial design is a partmdashrelies far less on larger firms The 50 largest firms in the sector generate only 18 percent of its total revenue
7 Although the US Census Bureau is barred from reporting data on individual establishments industry news reports suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
National Endowment for the Arts Research Report 56
Valuing the Art of Industrial DesignA Profile of the Sector and Its Importance to Manufacturing Technology and Innovation
Bonnie Nichols NEA Office of Research amp Analysis
August 2013
Research Report 56
August 2013
National Endowment for the Arts 1100 Pennsylvania Avenue NW Washington DC 20506 Telephone 202-682-5400
artsgov
Produced by the Office of Research amp Analysis
Sunil Iyengar Director
Bonnie Nichols Research Analyst
Other staff contributors Steven Shewfelt Tamika Shingler Melissa Menzer and Ellen Grantham
Editorial assistance by Don Ball
Designed by RomanThayer Design Inc
For their valuable assistance while this report was in production the NEA Office of Research amp Analysis would like to thank the following people Mariana Amatullo (Art Center College of Design) Mike Gallagher (Crown Equipment Corporation) Jim Hirabayashi (US Patent amp Trademark Office) Daniel Martinage (Industrial Designers Society of America) Emma Presler (Museum of Modern Art) Beth Siegel (Mt Auburn Associates) and Harry West and Kevin Young (Continuum)
Library of Congress Cataloging-in-Publication Data
Nichols Bonnie Valuing the art of industrial design a profile of the sector and its importance to manufacturing technology and innovation Bonnie Nichols pages cm -- (Research report 56) June 2013 Includes bibliographical references 1 Industrial designers--Salaries etc--United States--Statistics 2 Industrial design--Economic aspects--United States--Statistics I National Endowment for the Arts II Title TS23N53 2013 7452--dc23 2013028449
202-682-5496 VoiceTTY (a device for individuals who are deaf or hearing-impaired)
Individuals who do not use conventional print materials may contact the Arts Endowmentrsquos Office for AccessAbility at 202-682-5532 to obtain this publication in an alternate format
This publication is available free of charge in print or PDF format at artsgov the website of the National Endowment for the Arts
Table of Contents
4 Preface
7 Introduction
8 Executive Summary
12 Part 1 Industrial Design as an Occupation
24 Part 2 Industrial Design as a Business
36 Part 3 Industrial Design as a Product Innovator
46 Conclusion The NEA and Industrial Design
48 Appendix
49 References
4 | Preface
Preface Design is a field with a large and extensive presence in our nationrsquos manufacturing and services industries as documented by the national datasets that provide the basis for this report Designers are prolifically inventing new products processes and systems that have a profound impact on our economy and civil society
The National Endowment for the Arts (NEA) Design Program has been tracking numerous trends in the field of design from the growing movement of design thinking to social impact design Although this report brings together for the first time analytical perspectives regarding federal data on industrial design it cannot be all-encompassing This preface has benefited from conversations with some of the nationrsquos leading designers design curators and design firms to convey information not captured by the report itself
An Expanding Definition for Industrial Design Much of the data in this report are drawn from the US Bureau of Labor Statistics (BLS) The Occupational Handbook Outlook from the BLS defines industrial designers as ldquothose individuals that develop the concepts for manufactured products such as cars home appliances and toysrdquo While this dataset enables a quantitative grasp of the industry BLSrsquo definition is arguably limited in scope Todayrsquos industrial designers find themselves in a variety of roles and functions beyond the development of manufactured products
Industrial designers are working on projects for a variety of organizations from government entities to private enterprises Using a creative lens for approaching complex problems or challenges (often referred to as the design process) designers are engaged by a range of clients to bring a fresh approach to age-old issues Industrial designers are not just designing commercial products but designing user experiences processes and systems by applying the creative approach of what has been come to be known as ldquodesign thinkingrdquo The idea to utilize the design process as a way to analyze and innovate has been widely embracedmdashfrom business schools to major consulting practicesmdashand has changed the landscape of how industrial designers work
For example an industrial designer might not only design a high-tech medical device for a hospital but also the patientrsquos interactive experience and touch points with medical staff in the emergency room Similarly industrial designers might work with retail merchandisers to reorganize store floor plans and re-imagine the in-store experience for potential customers Design thinking requires industrial designers to work on diverse teams to solve these more complex challenges In a typical firm a team might include an engineer design strategist marketer and anthropologist as well as software designers and developers as products become more intelligent and responsive to media inputs
Valuing the Art of Industrial Design | 5
Historically industrial design has been a field of invention driven by market demand or clients Today there are many examples of designers pursuing clientless endeavors some have even been on display at the Museum of Modern Art in New York These artists probably would self-identify as industrial designers their contributions to developing clientless work as an art form is an acknowledged practice but one not quantifiable from the datasets explored in this report
Furthermore industrial designers are applying their skills to projects that achieve a broader social impact for populations that cannot afford to hire a designer directly1 For example Design that Matters is a 501(c)(3) nonprofit that ldquocreates new products that allow social enterprises in developing countries to offer improved services and scale more quicklyrdquo2 Design that Matters works with industrial designers manufacturers and other nongovernmental organizations to develop scalable products that serve low-resource communities around the globe Winner of the 2012 National Design Award for Corporate amp Institutional Achievement Design that Matters is developing product innovations within the nonprofit sector for significant impact One such innovation is an affordable phototherapy device to treat jaundiced newborns in South Asian and Sub-Saharan Africa
Postsecondary educational programs are retooling their curricula to reflect these more fluid approaches to industrial design Bachelorrsquos and masterrsquos programs in industrial design reflect the interdisciplinary nature of industrial design work Course curriculums at leading design institutions include anthropology systems design and entrepreneurship in addition to the traditional manufacturing and design studio course requirements Universities are also developing hybrid programs that apply design thinking to business and other fields of practice Professionals trained in these postsecondary programs might find themselves working for a company where their creative skills are engaged and applied to client-driven work or systems improvement The cross-disciplinary training and expanded professional role of industrial design thus make it difficult to assess the field conclusively by examining federal datasets alone
Designers as Inventors This research report sheds light on the significant role that designers play in invention of new products and services Creativity often begets innovation and invention According to data from the US Patent and Trademark Office approximately 40 percent of inventors named on design patents were also named on utility patents In contrast among all inventors named on utility patents only 2 percent were named on design patents
1 In 2012 the National Endowment for the Arts Smithsonianrsquos Cooper-Hewitt National Design Museum and Lemelson Foundation released a white paper ldquoDesign and Social Impactrdquo httpwwwneagovpubDesign-and-Social-Impactpdf
2 httpwwwdesignthatmattersorg
6 | Preface
These data demonstrate that designers are not only crafting new or improved visual ornamental designs for productsmdashthey are simultaneously inventing the new and useful products and processes themselves While this report quantifies the number of design patents obtained annually it can be challenging to identify the design firm or individual responsible for crafting a new product design Most often patents are assigned to the manufacturer or client company that commissions the design work While industrial designers may be the ones inventing new products their work is typically client-driven with the client organization becoming the patent assignee Nevertheless there is no doubt that designers play a crucial role in driving the creative process that results in new inventions or ornamental designs
Designers are also pursuing their creative process and new product designs through entrepreneurial ventures While most of the data here account for industrial design establishments and industrial designers on payroll many designers innovate products outside a formal business establishment In 2011 $92 million was pledged on Kickstarter to support design projects and 319 successful projects were funded3 Since their launch in 2009 4424 design projects have been launched on Kickstarter with a request for $877 million4 Browsing the posted projects in the design category reveals that the majority of proposals are for product design New funding platforms such as Kickstarter have enabled entrepreneurial designers to obtain capital to explore conceptual ideas and realize new inventions
Ultimately design is a tool to inspire innovation and influence systems change Industrial designers are creative professionals who are doing just that While we are unable to capture all the facets of the industrial design field in this research report we acknowledge the breadth of the field and the ever-expanding role of industrial designers as creative professionals who spark innovation commercial products and positive change The NEA report begins to quantify the role of industrial designers in the US economy and should provoke a more sustained and comprehensive inquiry about the importance of industrial design as a field
Jason Schupbach Director of DesignJennifer Hughes Design Specialist National Endowment for the Arts
3 httpwwwkickstartercomblog2011-the-stats
4 httpwwwkickstartercomhelpstats (Data retrieved June 25 2013)
Valuing the Art of Industrial Design | 7
Introduction For nearly four decades the National Endowment for the Arts has used federally collected data to portray the demographic and financial characteristics of artists as workers Designers have always been a vital segment of that population accounting for nearly 40 percent (about 830000) of all artists the largest share for any single artist occupation The category is broad and it includes fashion floral graphic interior and set designers as well as merchandise displayers It also includes commercial and industrial designers the subject of this report
The NEA has not previously attempted to provide in-depth information about the subgroups of occupations that make up the design field But the availability of such data from the US Bureau of Labor Statisticsmdashspecifically through a collaboration with state workforce agenciesmdashmakes a detailed rendering possible When it comes to understanding designers in the context of the industries that employ them moreover another federal statistical agency can be consulted the US Census Bureau
By using a combination of occupational and industry statistics this report enumerates industrial designers as workers the sectors that hire them the earnings of industrial designers and firms and the states and metropolitan areas where industrial design workers and industries are most prevalent
Why do we seek a baseline understanding of industrial design as a field Part of the answer lies in the reward of creating new knowledge As much research demonstrates artists as a whole show great fluidity when it comes to standard categories of employment They typically rely upon multiple jobs a combination of part-time and full-time work and they move with ease across the for-profit and nonprofit sectors Their portfolio careers while rich and diverse can prove difficult to track consistently for a clear picture of artistsrsquo contributions to the US economy
With industrial design as perhaps with design more generally a further challenge besets cultural researchers Industrial design is the handmaiden to a wide range of commercial industries To appreciate the full impact of industrial design workers and their businesses it is not enough to view this cohort in isolation One must trace the relationship of design to product manufacturing and to architectural and engineering firms and a host of other service industries This exercise is especially worthy at a time when a growing segment of the American public wants to know exactly where the arts can be found in manufacturing technology and product innovation
As for innovation this report uses a third federal data sourcemdashthe US Patent and Trademark Officemdashto represent designers as inventors The report thus addresses a specific ldquonoderdquo on the system map that accompanies the NEArsquos five-year research agenda set forth in the publication How Art Works (2011)5 That research topic is titled ldquoSocietal Capacities to Innovate and to Express Ideasrdquo The present analysis of the industrial design field allows us better to quantify this elusive component of the US arts ecosystem
Sunil Iyengar Director of Research amp Analysis National Endowment for the Arts
5 httpwwwneagovresearchHow-Art-Works
8 | Executive Summary
Executive Summary
Section One Industrial Design as an OccupationIndustrial designers also known as commercial designers develop the concepts for a variety of manufactured projects Most findings in this section come from data collected by the US Bureau of Labor Statistics
1) There are more than 40000 industrial designers in the United Statesn Thirty percent or approximately 12000 industrial designers are
self-employed This share is comparable to that for all artists (34 percent) but more than four times greater than the self-employment rate of all US workers (7 percent)
n Among salaried workers industrial designers number less than graphic designers (191440) merchandise-display designers (73490) floral designers (47110) and interior designers (40750)mdashbut they earn more than most design workers6
2) Most salaried industrial designers fall into one of two sectors manufacturing (11730 workers) or professional scientific and technical services (7570 workers)n Transportation equipment manufacturing (makers of auto and aerospace
parts and vehicles) is one of the best-paying industries for industrial designers The industry employs about 20 percent of all industrial designers in manufacturing
n The professional services sector includes a range of industries Among those retaining industrial designers on staff are specialized design firms (3990 industrial designers) engineering and architectural firms (2510) management scientific and technical consulting firms (380) and scientific RampD firms (300)
3) Michigan Rhode Island Wisconsin Indiana and Pennsylvania are the top five states by percentage of industrial designers in the workforcen Four out of the top five metropolitan areas by concentration of industrial
designers in the workforce are in Michigan Topping the list is the exceptionmdashKokomo Indiana also an automotive manufacturing site
n California and Michigan each employ more than 3000 industrial designers Both states host major hubs of auto design (eg the GM Technical Center in Warren Michigan and the BMW Design Works and the Volvo Monitoring and Concept Center in Ventura County California)
n Industrial designers in Michigan earn an average salary of $69870 a year or $10000 more than the national average for this occupation Industrial designers in Silicon Valley are also among the nationrsquos best-paid industrial designers
6 Architects and landscape architects fall into a different occupational category than designers so are excluded from this comparison
Valuing the Art of Industrial Design | 9
4) Over the next several years a growing number of industrial designers will find work in the professional services sector (eg engineering firms and specialized design firms)n Industrial designer employment in this sector is projected to leap by 29
percent
n Manufacturers will continue to employ the greatest share of salaried industrial designers Yet projected declines in manufacturing employment overall will trim the number of industrial designers in this sector
n Continued growth is projected for overall employment of industrial designers though the growth rate (+105 percent from 2010 to 2020) is somewhat lower than for all occupations as a whole (+143 percent)
Section Two Industrial Design as a BusinessAs an industry industrial design refers to business establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of manufactured products Most findings in this section come from data collected by the US Census Bureau
1) There are 1579 industrial design business establishments in the US with a total annual payroll of approximately $14 billionn In 2007 the most recent year for which such data are available industrial
design firms earned more than $15 billion in total revenue About 94 percent came from sales of product design model design and fabrication and other industrial design services
n Other revenue came from clothing and graphic design and drafting and other specialized services among other sources
n Roughly 14 percent (218) of all industrial design firms earned about $113 million by exporting their services The sales accounted for roughly one-fourth of these firmsrsquo total revenue ($468 million)
2) Total revenues earned by the industrial design industry are highly concentrated among the largest firmsn The four largest industrial design firms generate 11 percent of the industryrsquos
total revenue the 20 largest 32 percent and the 50 largest 45 percent7
n By contrast the professional services sector as a wholemdashof which industrial design is a partmdashrelies far less on larger firms The 50 largest firms in the sector generate only 18 percent of its total revenue
7 Although the US Census Bureau is barred from reporting data on individual establishments industry news reports suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Research Report 56
August 2013
National Endowment for the Arts 1100 Pennsylvania Avenue NW Washington DC 20506 Telephone 202-682-5400
artsgov
Produced by the Office of Research amp Analysis
Sunil Iyengar Director
Bonnie Nichols Research Analyst
Other staff contributors Steven Shewfelt Tamika Shingler Melissa Menzer and Ellen Grantham
Editorial assistance by Don Ball
Designed by RomanThayer Design Inc
For their valuable assistance while this report was in production the NEA Office of Research amp Analysis would like to thank the following people Mariana Amatullo (Art Center College of Design) Mike Gallagher (Crown Equipment Corporation) Jim Hirabayashi (US Patent amp Trademark Office) Daniel Martinage (Industrial Designers Society of America) Emma Presler (Museum of Modern Art) Beth Siegel (Mt Auburn Associates) and Harry West and Kevin Young (Continuum)
Library of Congress Cataloging-in-Publication Data
Nichols Bonnie Valuing the art of industrial design a profile of the sector and its importance to manufacturing technology and innovation Bonnie Nichols pages cm -- (Research report 56) June 2013 Includes bibliographical references 1 Industrial designers--Salaries etc--United States--Statistics 2 Industrial design--Economic aspects--United States--Statistics I National Endowment for the Arts II Title TS23N53 2013 7452--dc23 2013028449
202-682-5496 VoiceTTY (a device for individuals who are deaf or hearing-impaired)
Individuals who do not use conventional print materials may contact the Arts Endowmentrsquos Office for AccessAbility at 202-682-5532 to obtain this publication in an alternate format
This publication is available free of charge in print or PDF format at artsgov the website of the National Endowment for the Arts
Table of Contents
4 Preface
7 Introduction
8 Executive Summary
12 Part 1 Industrial Design as an Occupation
24 Part 2 Industrial Design as a Business
36 Part 3 Industrial Design as a Product Innovator
46 Conclusion The NEA and Industrial Design
48 Appendix
49 References
4 | Preface
Preface Design is a field with a large and extensive presence in our nationrsquos manufacturing and services industries as documented by the national datasets that provide the basis for this report Designers are prolifically inventing new products processes and systems that have a profound impact on our economy and civil society
The National Endowment for the Arts (NEA) Design Program has been tracking numerous trends in the field of design from the growing movement of design thinking to social impact design Although this report brings together for the first time analytical perspectives regarding federal data on industrial design it cannot be all-encompassing This preface has benefited from conversations with some of the nationrsquos leading designers design curators and design firms to convey information not captured by the report itself
An Expanding Definition for Industrial Design Much of the data in this report are drawn from the US Bureau of Labor Statistics (BLS) The Occupational Handbook Outlook from the BLS defines industrial designers as ldquothose individuals that develop the concepts for manufactured products such as cars home appliances and toysrdquo While this dataset enables a quantitative grasp of the industry BLSrsquo definition is arguably limited in scope Todayrsquos industrial designers find themselves in a variety of roles and functions beyond the development of manufactured products
Industrial designers are working on projects for a variety of organizations from government entities to private enterprises Using a creative lens for approaching complex problems or challenges (often referred to as the design process) designers are engaged by a range of clients to bring a fresh approach to age-old issues Industrial designers are not just designing commercial products but designing user experiences processes and systems by applying the creative approach of what has been come to be known as ldquodesign thinkingrdquo The idea to utilize the design process as a way to analyze and innovate has been widely embracedmdashfrom business schools to major consulting practicesmdashand has changed the landscape of how industrial designers work
For example an industrial designer might not only design a high-tech medical device for a hospital but also the patientrsquos interactive experience and touch points with medical staff in the emergency room Similarly industrial designers might work with retail merchandisers to reorganize store floor plans and re-imagine the in-store experience for potential customers Design thinking requires industrial designers to work on diverse teams to solve these more complex challenges In a typical firm a team might include an engineer design strategist marketer and anthropologist as well as software designers and developers as products become more intelligent and responsive to media inputs
Valuing the Art of Industrial Design | 5
Historically industrial design has been a field of invention driven by market demand or clients Today there are many examples of designers pursuing clientless endeavors some have even been on display at the Museum of Modern Art in New York These artists probably would self-identify as industrial designers their contributions to developing clientless work as an art form is an acknowledged practice but one not quantifiable from the datasets explored in this report
Furthermore industrial designers are applying their skills to projects that achieve a broader social impact for populations that cannot afford to hire a designer directly1 For example Design that Matters is a 501(c)(3) nonprofit that ldquocreates new products that allow social enterprises in developing countries to offer improved services and scale more quicklyrdquo2 Design that Matters works with industrial designers manufacturers and other nongovernmental organizations to develop scalable products that serve low-resource communities around the globe Winner of the 2012 National Design Award for Corporate amp Institutional Achievement Design that Matters is developing product innovations within the nonprofit sector for significant impact One such innovation is an affordable phototherapy device to treat jaundiced newborns in South Asian and Sub-Saharan Africa
Postsecondary educational programs are retooling their curricula to reflect these more fluid approaches to industrial design Bachelorrsquos and masterrsquos programs in industrial design reflect the interdisciplinary nature of industrial design work Course curriculums at leading design institutions include anthropology systems design and entrepreneurship in addition to the traditional manufacturing and design studio course requirements Universities are also developing hybrid programs that apply design thinking to business and other fields of practice Professionals trained in these postsecondary programs might find themselves working for a company where their creative skills are engaged and applied to client-driven work or systems improvement The cross-disciplinary training and expanded professional role of industrial design thus make it difficult to assess the field conclusively by examining federal datasets alone
Designers as Inventors This research report sheds light on the significant role that designers play in invention of new products and services Creativity often begets innovation and invention According to data from the US Patent and Trademark Office approximately 40 percent of inventors named on design patents were also named on utility patents In contrast among all inventors named on utility patents only 2 percent were named on design patents
1 In 2012 the National Endowment for the Arts Smithsonianrsquos Cooper-Hewitt National Design Museum and Lemelson Foundation released a white paper ldquoDesign and Social Impactrdquo httpwwwneagovpubDesign-and-Social-Impactpdf
2 httpwwwdesignthatmattersorg
6 | Preface
These data demonstrate that designers are not only crafting new or improved visual ornamental designs for productsmdashthey are simultaneously inventing the new and useful products and processes themselves While this report quantifies the number of design patents obtained annually it can be challenging to identify the design firm or individual responsible for crafting a new product design Most often patents are assigned to the manufacturer or client company that commissions the design work While industrial designers may be the ones inventing new products their work is typically client-driven with the client organization becoming the patent assignee Nevertheless there is no doubt that designers play a crucial role in driving the creative process that results in new inventions or ornamental designs
Designers are also pursuing their creative process and new product designs through entrepreneurial ventures While most of the data here account for industrial design establishments and industrial designers on payroll many designers innovate products outside a formal business establishment In 2011 $92 million was pledged on Kickstarter to support design projects and 319 successful projects were funded3 Since their launch in 2009 4424 design projects have been launched on Kickstarter with a request for $877 million4 Browsing the posted projects in the design category reveals that the majority of proposals are for product design New funding platforms such as Kickstarter have enabled entrepreneurial designers to obtain capital to explore conceptual ideas and realize new inventions
Ultimately design is a tool to inspire innovation and influence systems change Industrial designers are creative professionals who are doing just that While we are unable to capture all the facets of the industrial design field in this research report we acknowledge the breadth of the field and the ever-expanding role of industrial designers as creative professionals who spark innovation commercial products and positive change The NEA report begins to quantify the role of industrial designers in the US economy and should provoke a more sustained and comprehensive inquiry about the importance of industrial design as a field
Jason Schupbach Director of DesignJennifer Hughes Design Specialist National Endowment for the Arts
3 httpwwwkickstartercomblog2011-the-stats
4 httpwwwkickstartercomhelpstats (Data retrieved June 25 2013)
Valuing the Art of Industrial Design | 7
Introduction For nearly four decades the National Endowment for the Arts has used federally collected data to portray the demographic and financial characteristics of artists as workers Designers have always been a vital segment of that population accounting for nearly 40 percent (about 830000) of all artists the largest share for any single artist occupation The category is broad and it includes fashion floral graphic interior and set designers as well as merchandise displayers It also includes commercial and industrial designers the subject of this report
The NEA has not previously attempted to provide in-depth information about the subgroups of occupations that make up the design field But the availability of such data from the US Bureau of Labor Statisticsmdashspecifically through a collaboration with state workforce agenciesmdashmakes a detailed rendering possible When it comes to understanding designers in the context of the industries that employ them moreover another federal statistical agency can be consulted the US Census Bureau
By using a combination of occupational and industry statistics this report enumerates industrial designers as workers the sectors that hire them the earnings of industrial designers and firms and the states and metropolitan areas where industrial design workers and industries are most prevalent
Why do we seek a baseline understanding of industrial design as a field Part of the answer lies in the reward of creating new knowledge As much research demonstrates artists as a whole show great fluidity when it comes to standard categories of employment They typically rely upon multiple jobs a combination of part-time and full-time work and they move with ease across the for-profit and nonprofit sectors Their portfolio careers while rich and diverse can prove difficult to track consistently for a clear picture of artistsrsquo contributions to the US economy
With industrial design as perhaps with design more generally a further challenge besets cultural researchers Industrial design is the handmaiden to a wide range of commercial industries To appreciate the full impact of industrial design workers and their businesses it is not enough to view this cohort in isolation One must trace the relationship of design to product manufacturing and to architectural and engineering firms and a host of other service industries This exercise is especially worthy at a time when a growing segment of the American public wants to know exactly where the arts can be found in manufacturing technology and product innovation
As for innovation this report uses a third federal data sourcemdashthe US Patent and Trademark Officemdashto represent designers as inventors The report thus addresses a specific ldquonoderdquo on the system map that accompanies the NEArsquos five-year research agenda set forth in the publication How Art Works (2011)5 That research topic is titled ldquoSocietal Capacities to Innovate and to Express Ideasrdquo The present analysis of the industrial design field allows us better to quantify this elusive component of the US arts ecosystem
Sunil Iyengar Director of Research amp Analysis National Endowment for the Arts
5 httpwwwneagovresearchHow-Art-Works
8 | Executive Summary
Executive Summary
Section One Industrial Design as an OccupationIndustrial designers also known as commercial designers develop the concepts for a variety of manufactured projects Most findings in this section come from data collected by the US Bureau of Labor Statistics
1) There are more than 40000 industrial designers in the United Statesn Thirty percent or approximately 12000 industrial designers are
self-employed This share is comparable to that for all artists (34 percent) but more than four times greater than the self-employment rate of all US workers (7 percent)
n Among salaried workers industrial designers number less than graphic designers (191440) merchandise-display designers (73490) floral designers (47110) and interior designers (40750)mdashbut they earn more than most design workers6
2) Most salaried industrial designers fall into one of two sectors manufacturing (11730 workers) or professional scientific and technical services (7570 workers)n Transportation equipment manufacturing (makers of auto and aerospace
parts and vehicles) is one of the best-paying industries for industrial designers The industry employs about 20 percent of all industrial designers in manufacturing
n The professional services sector includes a range of industries Among those retaining industrial designers on staff are specialized design firms (3990 industrial designers) engineering and architectural firms (2510) management scientific and technical consulting firms (380) and scientific RampD firms (300)
3) Michigan Rhode Island Wisconsin Indiana and Pennsylvania are the top five states by percentage of industrial designers in the workforcen Four out of the top five metropolitan areas by concentration of industrial
designers in the workforce are in Michigan Topping the list is the exceptionmdashKokomo Indiana also an automotive manufacturing site
n California and Michigan each employ more than 3000 industrial designers Both states host major hubs of auto design (eg the GM Technical Center in Warren Michigan and the BMW Design Works and the Volvo Monitoring and Concept Center in Ventura County California)
n Industrial designers in Michigan earn an average salary of $69870 a year or $10000 more than the national average for this occupation Industrial designers in Silicon Valley are also among the nationrsquos best-paid industrial designers
6 Architects and landscape architects fall into a different occupational category than designers so are excluded from this comparison
Valuing the Art of Industrial Design | 9
4) Over the next several years a growing number of industrial designers will find work in the professional services sector (eg engineering firms and specialized design firms)n Industrial designer employment in this sector is projected to leap by 29
percent
n Manufacturers will continue to employ the greatest share of salaried industrial designers Yet projected declines in manufacturing employment overall will trim the number of industrial designers in this sector
n Continued growth is projected for overall employment of industrial designers though the growth rate (+105 percent from 2010 to 2020) is somewhat lower than for all occupations as a whole (+143 percent)
Section Two Industrial Design as a BusinessAs an industry industrial design refers to business establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of manufactured products Most findings in this section come from data collected by the US Census Bureau
1) There are 1579 industrial design business establishments in the US with a total annual payroll of approximately $14 billionn In 2007 the most recent year for which such data are available industrial
design firms earned more than $15 billion in total revenue About 94 percent came from sales of product design model design and fabrication and other industrial design services
n Other revenue came from clothing and graphic design and drafting and other specialized services among other sources
n Roughly 14 percent (218) of all industrial design firms earned about $113 million by exporting their services The sales accounted for roughly one-fourth of these firmsrsquo total revenue ($468 million)
2) Total revenues earned by the industrial design industry are highly concentrated among the largest firmsn The four largest industrial design firms generate 11 percent of the industryrsquos
total revenue the 20 largest 32 percent and the 50 largest 45 percent7
n By contrast the professional services sector as a wholemdashof which industrial design is a partmdashrelies far less on larger firms The 50 largest firms in the sector generate only 18 percent of its total revenue
7 Although the US Census Bureau is barred from reporting data on individual establishments industry news reports suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Table of Contents
4 Preface
7 Introduction
8 Executive Summary
12 Part 1 Industrial Design as an Occupation
24 Part 2 Industrial Design as a Business
36 Part 3 Industrial Design as a Product Innovator
46 Conclusion The NEA and Industrial Design
48 Appendix
49 References
4 | Preface
Preface Design is a field with a large and extensive presence in our nationrsquos manufacturing and services industries as documented by the national datasets that provide the basis for this report Designers are prolifically inventing new products processes and systems that have a profound impact on our economy and civil society
The National Endowment for the Arts (NEA) Design Program has been tracking numerous trends in the field of design from the growing movement of design thinking to social impact design Although this report brings together for the first time analytical perspectives regarding federal data on industrial design it cannot be all-encompassing This preface has benefited from conversations with some of the nationrsquos leading designers design curators and design firms to convey information not captured by the report itself
An Expanding Definition for Industrial Design Much of the data in this report are drawn from the US Bureau of Labor Statistics (BLS) The Occupational Handbook Outlook from the BLS defines industrial designers as ldquothose individuals that develop the concepts for manufactured products such as cars home appliances and toysrdquo While this dataset enables a quantitative grasp of the industry BLSrsquo definition is arguably limited in scope Todayrsquos industrial designers find themselves in a variety of roles and functions beyond the development of manufactured products
Industrial designers are working on projects for a variety of organizations from government entities to private enterprises Using a creative lens for approaching complex problems or challenges (often referred to as the design process) designers are engaged by a range of clients to bring a fresh approach to age-old issues Industrial designers are not just designing commercial products but designing user experiences processes and systems by applying the creative approach of what has been come to be known as ldquodesign thinkingrdquo The idea to utilize the design process as a way to analyze and innovate has been widely embracedmdashfrom business schools to major consulting practicesmdashand has changed the landscape of how industrial designers work
For example an industrial designer might not only design a high-tech medical device for a hospital but also the patientrsquos interactive experience and touch points with medical staff in the emergency room Similarly industrial designers might work with retail merchandisers to reorganize store floor plans and re-imagine the in-store experience for potential customers Design thinking requires industrial designers to work on diverse teams to solve these more complex challenges In a typical firm a team might include an engineer design strategist marketer and anthropologist as well as software designers and developers as products become more intelligent and responsive to media inputs
Valuing the Art of Industrial Design | 5
Historically industrial design has been a field of invention driven by market demand or clients Today there are many examples of designers pursuing clientless endeavors some have even been on display at the Museum of Modern Art in New York These artists probably would self-identify as industrial designers their contributions to developing clientless work as an art form is an acknowledged practice but one not quantifiable from the datasets explored in this report
Furthermore industrial designers are applying their skills to projects that achieve a broader social impact for populations that cannot afford to hire a designer directly1 For example Design that Matters is a 501(c)(3) nonprofit that ldquocreates new products that allow social enterprises in developing countries to offer improved services and scale more quicklyrdquo2 Design that Matters works with industrial designers manufacturers and other nongovernmental organizations to develop scalable products that serve low-resource communities around the globe Winner of the 2012 National Design Award for Corporate amp Institutional Achievement Design that Matters is developing product innovations within the nonprofit sector for significant impact One such innovation is an affordable phototherapy device to treat jaundiced newborns in South Asian and Sub-Saharan Africa
Postsecondary educational programs are retooling their curricula to reflect these more fluid approaches to industrial design Bachelorrsquos and masterrsquos programs in industrial design reflect the interdisciplinary nature of industrial design work Course curriculums at leading design institutions include anthropology systems design and entrepreneurship in addition to the traditional manufacturing and design studio course requirements Universities are also developing hybrid programs that apply design thinking to business and other fields of practice Professionals trained in these postsecondary programs might find themselves working for a company where their creative skills are engaged and applied to client-driven work or systems improvement The cross-disciplinary training and expanded professional role of industrial design thus make it difficult to assess the field conclusively by examining federal datasets alone
Designers as Inventors This research report sheds light on the significant role that designers play in invention of new products and services Creativity often begets innovation and invention According to data from the US Patent and Trademark Office approximately 40 percent of inventors named on design patents were also named on utility patents In contrast among all inventors named on utility patents only 2 percent were named on design patents
1 In 2012 the National Endowment for the Arts Smithsonianrsquos Cooper-Hewitt National Design Museum and Lemelson Foundation released a white paper ldquoDesign and Social Impactrdquo httpwwwneagovpubDesign-and-Social-Impactpdf
2 httpwwwdesignthatmattersorg
6 | Preface
These data demonstrate that designers are not only crafting new or improved visual ornamental designs for productsmdashthey are simultaneously inventing the new and useful products and processes themselves While this report quantifies the number of design patents obtained annually it can be challenging to identify the design firm or individual responsible for crafting a new product design Most often patents are assigned to the manufacturer or client company that commissions the design work While industrial designers may be the ones inventing new products their work is typically client-driven with the client organization becoming the patent assignee Nevertheless there is no doubt that designers play a crucial role in driving the creative process that results in new inventions or ornamental designs
Designers are also pursuing their creative process and new product designs through entrepreneurial ventures While most of the data here account for industrial design establishments and industrial designers on payroll many designers innovate products outside a formal business establishment In 2011 $92 million was pledged on Kickstarter to support design projects and 319 successful projects were funded3 Since their launch in 2009 4424 design projects have been launched on Kickstarter with a request for $877 million4 Browsing the posted projects in the design category reveals that the majority of proposals are for product design New funding platforms such as Kickstarter have enabled entrepreneurial designers to obtain capital to explore conceptual ideas and realize new inventions
Ultimately design is a tool to inspire innovation and influence systems change Industrial designers are creative professionals who are doing just that While we are unable to capture all the facets of the industrial design field in this research report we acknowledge the breadth of the field and the ever-expanding role of industrial designers as creative professionals who spark innovation commercial products and positive change The NEA report begins to quantify the role of industrial designers in the US economy and should provoke a more sustained and comprehensive inquiry about the importance of industrial design as a field
Jason Schupbach Director of DesignJennifer Hughes Design Specialist National Endowment for the Arts
3 httpwwwkickstartercomblog2011-the-stats
4 httpwwwkickstartercomhelpstats (Data retrieved June 25 2013)
Valuing the Art of Industrial Design | 7
Introduction For nearly four decades the National Endowment for the Arts has used federally collected data to portray the demographic and financial characteristics of artists as workers Designers have always been a vital segment of that population accounting for nearly 40 percent (about 830000) of all artists the largest share for any single artist occupation The category is broad and it includes fashion floral graphic interior and set designers as well as merchandise displayers It also includes commercial and industrial designers the subject of this report
The NEA has not previously attempted to provide in-depth information about the subgroups of occupations that make up the design field But the availability of such data from the US Bureau of Labor Statisticsmdashspecifically through a collaboration with state workforce agenciesmdashmakes a detailed rendering possible When it comes to understanding designers in the context of the industries that employ them moreover another federal statistical agency can be consulted the US Census Bureau
By using a combination of occupational and industry statistics this report enumerates industrial designers as workers the sectors that hire them the earnings of industrial designers and firms and the states and metropolitan areas where industrial design workers and industries are most prevalent
Why do we seek a baseline understanding of industrial design as a field Part of the answer lies in the reward of creating new knowledge As much research demonstrates artists as a whole show great fluidity when it comes to standard categories of employment They typically rely upon multiple jobs a combination of part-time and full-time work and they move with ease across the for-profit and nonprofit sectors Their portfolio careers while rich and diverse can prove difficult to track consistently for a clear picture of artistsrsquo contributions to the US economy
With industrial design as perhaps with design more generally a further challenge besets cultural researchers Industrial design is the handmaiden to a wide range of commercial industries To appreciate the full impact of industrial design workers and their businesses it is not enough to view this cohort in isolation One must trace the relationship of design to product manufacturing and to architectural and engineering firms and a host of other service industries This exercise is especially worthy at a time when a growing segment of the American public wants to know exactly where the arts can be found in manufacturing technology and product innovation
As for innovation this report uses a third federal data sourcemdashthe US Patent and Trademark Officemdashto represent designers as inventors The report thus addresses a specific ldquonoderdquo on the system map that accompanies the NEArsquos five-year research agenda set forth in the publication How Art Works (2011)5 That research topic is titled ldquoSocietal Capacities to Innovate and to Express Ideasrdquo The present analysis of the industrial design field allows us better to quantify this elusive component of the US arts ecosystem
Sunil Iyengar Director of Research amp Analysis National Endowment for the Arts
5 httpwwwneagovresearchHow-Art-Works
8 | Executive Summary
Executive Summary
Section One Industrial Design as an OccupationIndustrial designers also known as commercial designers develop the concepts for a variety of manufactured projects Most findings in this section come from data collected by the US Bureau of Labor Statistics
1) There are more than 40000 industrial designers in the United Statesn Thirty percent or approximately 12000 industrial designers are
self-employed This share is comparable to that for all artists (34 percent) but more than four times greater than the self-employment rate of all US workers (7 percent)
n Among salaried workers industrial designers number less than graphic designers (191440) merchandise-display designers (73490) floral designers (47110) and interior designers (40750)mdashbut they earn more than most design workers6
2) Most salaried industrial designers fall into one of two sectors manufacturing (11730 workers) or professional scientific and technical services (7570 workers)n Transportation equipment manufacturing (makers of auto and aerospace
parts and vehicles) is one of the best-paying industries for industrial designers The industry employs about 20 percent of all industrial designers in manufacturing
n The professional services sector includes a range of industries Among those retaining industrial designers on staff are specialized design firms (3990 industrial designers) engineering and architectural firms (2510) management scientific and technical consulting firms (380) and scientific RampD firms (300)
3) Michigan Rhode Island Wisconsin Indiana and Pennsylvania are the top five states by percentage of industrial designers in the workforcen Four out of the top five metropolitan areas by concentration of industrial
designers in the workforce are in Michigan Topping the list is the exceptionmdashKokomo Indiana also an automotive manufacturing site
n California and Michigan each employ more than 3000 industrial designers Both states host major hubs of auto design (eg the GM Technical Center in Warren Michigan and the BMW Design Works and the Volvo Monitoring and Concept Center in Ventura County California)
n Industrial designers in Michigan earn an average salary of $69870 a year or $10000 more than the national average for this occupation Industrial designers in Silicon Valley are also among the nationrsquos best-paid industrial designers
6 Architects and landscape architects fall into a different occupational category than designers so are excluded from this comparison
Valuing the Art of Industrial Design | 9
4) Over the next several years a growing number of industrial designers will find work in the professional services sector (eg engineering firms and specialized design firms)n Industrial designer employment in this sector is projected to leap by 29
percent
n Manufacturers will continue to employ the greatest share of salaried industrial designers Yet projected declines in manufacturing employment overall will trim the number of industrial designers in this sector
n Continued growth is projected for overall employment of industrial designers though the growth rate (+105 percent from 2010 to 2020) is somewhat lower than for all occupations as a whole (+143 percent)
Section Two Industrial Design as a BusinessAs an industry industrial design refers to business establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of manufactured products Most findings in this section come from data collected by the US Census Bureau
1) There are 1579 industrial design business establishments in the US with a total annual payroll of approximately $14 billionn In 2007 the most recent year for which such data are available industrial
design firms earned more than $15 billion in total revenue About 94 percent came from sales of product design model design and fabrication and other industrial design services
n Other revenue came from clothing and graphic design and drafting and other specialized services among other sources
n Roughly 14 percent (218) of all industrial design firms earned about $113 million by exporting their services The sales accounted for roughly one-fourth of these firmsrsquo total revenue ($468 million)
2) Total revenues earned by the industrial design industry are highly concentrated among the largest firmsn The four largest industrial design firms generate 11 percent of the industryrsquos
total revenue the 20 largest 32 percent and the 50 largest 45 percent7
n By contrast the professional services sector as a wholemdashof which industrial design is a partmdashrelies far less on larger firms The 50 largest firms in the sector generate only 18 percent of its total revenue
7 Although the US Census Bureau is barred from reporting data on individual establishments industry news reports suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
4 | Preface
Preface Design is a field with a large and extensive presence in our nationrsquos manufacturing and services industries as documented by the national datasets that provide the basis for this report Designers are prolifically inventing new products processes and systems that have a profound impact on our economy and civil society
The National Endowment for the Arts (NEA) Design Program has been tracking numerous trends in the field of design from the growing movement of design thinking to social impact design Although this report brings together for the first time analytical perspectives regarding federal data on industrial design it cannot be all-encompassing This preface has benefited from conversations with some of the nationrsquos leading designers design curators and design firms to convey information not captured by the report itself
An Expanding Definition for Industrial Design Much of the data in this report are drawn from the US Bureau of Labor Statistics (BLS) The Occupational Handbook Outlook from the BLS defines industrial designers as ldquothose individuals that develop the concepts for manufactured products such as cars home appliances and toysrdquo While this dataset enables a quantitative grasp of the industry BLSrsquo definition is arguably limited in scope Todayrsquos industrial designers find themselves in a variety of roles and functions beyond the development of manufactured products
Industrial designers are working on projects for a variety of organizations from government entities to private enterprises Using a creative lens for approaching complex problems or challenges (often referred to as the design process) designers are engaged by a range of clients to bring a fresh approach to age-old issues Industrial designers are not just designing commercial products but designing user experiences processes and systems by applying the creative approach of what has been come to be known as ldquodesign thinkingrdquo The idea to utilize the design process as a way to analyze and innovate has been widely embracedmdashfrom business schools to major consulting practicesmdashand has changed the landscape of how industrial designers work
For example an industrial designer might not only design a high-tech medical device for a hospital but also the patientrsquos interactive experience and touch points with medical staff in the emergency room Similarly industrial designers might work with retail merchandisers to reorganize store floor plans and re-imagine the in-store experience for potential customers Design thinking requires industrial designers to work on diverse teams to solve these more complex challenges In a typical firm a team might include an engineer design strategist marketer and anthropologist as well as software designers and developers as products become more intelligent and responsive to media inputs
Valuing the Art of Industrial Design | 5
Historically industrial design has been a field of invention driven by market demand or clients Today there are many examples of designers pursuing clientless endeavors some have even been on display at the Museum of Modern Art in New York These artists probably would self-identify as industrial designers their contributions to developing clientless work as an art form is an acknowledged practice but one not quantifiable from the datasets explored in this report
Furthermore industrial designers are applying their skills to projects that achieve a broader social impact for populations that cannot afford to hire a designer directly1 For example Design that Matters is a 501(c)(3) nonprofit that ldquocreates new products that allow social enterprises in developing countries to offer improved services and scale more quicklyrdquo2 Design that Matters works with industrial designers manufacturers and other nongovernmental organizations to develop scalable products that serve low-resource communities around the globe Winner of the 2012 National Design Award for Corporate amp Institutional Achievement Design that Matters is developing product innovations within the nonprofit sector for significant impact One such innovation is an affordable phototherapy device to treat jaundiced newborns in South Asian and Sub-Saharan Africa
Postsecondary educational programs are retooling their curricula to reflect these more fluid approaches to industrial design Bachelorrsquos and masterrsquos programs in industrial design reflect the interdisciplinary nature of industrial design work Course curriculums at leading design institutions include anthropology systems design and entrepreneurship in addition to the traditional manufacturing and design studio course requirements Universities are also developing hybrid programs that apply design thinking to business and other fields of practice Professionals trained in these postsecondary programs might find themselves working for a company where their creative skills are engaged and applied to client-driven work or systems improvement The cross-disciplinary training and expanded professional role of industrial design thus make it difficult to assess the field conclusively by examining federal datasets alone
Designers as Inventors This research report sheds light on the significant role that designers play in invention of new products and services Creativity often begets innovation and invention According to data from the US Patent and Trademark Office approximately 40 percent of inventors named on design patents were also named on utility patents In contrast among all inventors named on utility patents only 2 percent were named on design patents
1 In 2012 the National Endowment for the Arts Smithsonianrsquos Cooper-Hewitt National Design Museum and Lemelson Foundation released a white paper ldquoDesign and Social Impactrdquo httpwwwneagovpubDesign-and-Social-Impactpdf
2 httpwwwdesignthatmattersorg
6 | Preface
These data demonstrate that designers are not only crafting new or improved visual ornamental designs for productsmdashthey are simultaneously inventing the new and useful products and processes themselves While this report quantifies the number of design patents obtained annually it can be challenging to identify the design firm or individual responsible for crafting a new product design Most often patents are assigned to the manufacturer or client company that commissions the design work While industrial designers may be the ones inventing new products their work is typically client-driven with the client organization becoming the patent assignee Nevertheless there is no doubt that designers play a crucial role in driving the creative process that results in new inventions or ornamental designs
Designers are also pursuing their creative process and new product designs through entrepreneurial ventures While most of the data here account for industrial design establishments and industrial designers on payroll many designers innovate products outside a formal business establishment In 2011 $92 million was pledged on Kickstarter to support design projects and 319 successful projects were funded3 Since their launch in 2009 4424 design projects have been launched on Kickstarter with a request for $877 million4 Browsing the posted projects in the design category reveals that the majority of proposals are for product design New funding platforms such as Kickstarter have enabled entrepreneurial designers to obtain capital to explore conceptual ideas and realize new inventions
Ultimately design is a tool to inspire innovation and influence systems change Industrial designers are creative professionals who are doing just that While we are unable to capture all the facets of the industrial design field in this research report we acknowledge the breadth of the field and the ever-expanding role of industrial designers as creative professionals who spark innovation commercial products and positive change The NEA report begins to quantify the role of industrial designers in the US economy and should provoke a more sustained and comprehensive inquiry about the importance of industrial design as a field
Jason Schupbach Director of DesignJennifer Hughes Design Specialist National Endowment for the Arts
3 httpwwwkickstartercomblog2011-the-stats
4 httpwwwkickstartercomhelpstats (Data retrieved June 25 2013)
Valuing the Art of Industrial Design | 7
Introduction For nearly four decades the National Endowment for the Arts has used federally collected data to portray the demographic and financial characteristics of artists as workers Designers have always been a vital segment of that population accounting for nearly 40 percent (about 830000) of all artists the largest share for any single artist occupation The category is broad and it includes fashion floral graphic interior and set designers as well as merchandise displayers It also includes commercial and industrial designers the subject of this report
The NEA has not previously attempted to provide in-depth information about the subgroups of occupations that make up the design field But the availability of such data from the US Bureau of Labor Statisticsmdashspecifically through a collaboration with state workforce agenciesmdashmakes a detailed rendering possible When it comes to understanding designers in the context of the industries that employ them moreover another federal statistical agency can be consulted the US Census Bureau
By using a combination of occupational and industry statistics this report enumerates industrial designers as workers the sectors that hire them the earnings of industrial designers and firms and the states and metropolitan areas where industrial design workers and industries are most prevalent
Why do we seek a baseline understanding of industrial design as a field Part of the answer lies in the reward of creating new knowledge As much research demonstrates artists as a whole show great fluidity when it comes to standard categories of employment They typically rely upon multiple jobs a combination of part-time and full-time work and they move with ease across the for-profit and nonprofit sectors Their portfolio careers while rich and diverse can prove difficult to track consistently for a clear picture of artistsrsquo contributions to the US economy
With industrial design as perhaps with design more generally a further challenge besets cultural researchers Industrial design is the handmaiden to a wide range of commercial industries To appreciate the full impact of industrial design workers and their businesses it is not enough to view this cohort in isolation One must trace the relationship of design to product manufacturing and to architectural and engineering firms and a host of other service industries This exercise is especially worthy at a time when a growing segment of the American public wants to know exactly where the arts can be found in manufacturing technology and product innovation
As for innovation this report uses a third federal data sourcemdashthe US Patent and Trademark Officemdashto represent designers as inventors The report thus addresses a specific ldquonoderdquo on the system map that accompanies the NEArsquos five-year research agenda set forth in the publication How Art Works (2011)5 That research topic is titled ldquoSocietal Capacities to Innovate and to Express Ideasrdquo The present analysis of the industrial design field allows us better to quantify this elusive component of the US arts ecosystem
Sunil Iyengar Director of Research amp Analysis National Endowment for the Arts
5 httpwwwneagovresearchHow-Art-Works
8 | Executive Summary
Executive Summary
Section One Industrial Design as an OccupationIndustrial designers also known as commercial designers develop the concepts for a variety of manufactured projects Most findings in this section come from data collected by the US Bureau of Labor Statistics
1) There are more than 40000 industrial designers in the United Statesn Thirty percent or approximately 12000 industrial designers are
self-employed This share is comparable to that for all artists (34 percent) but more than four times greater than the self-employment rate of all US workers (7 percent)
n Among salaried workers industrial designers number less than graphic designers (191440) merchandise-display designers (73490) floral designers (47110) and interior designers (40750)mdashbut they earn more than most design workers6
2) Most salaried industrial designers fall into one of two sectors manufacturing (11730 workers) or professional scientific and technical services (7570 workers)n Transportation equipment manufacturing (makers of auto and aerospace
parts and vehicles) is one of the best-paying industries for industrial designers The industry employs about 20 percent of all industrial designers in manufacturing
n The professional services sector includes a range of industries Among those retaining industrial designers on staff are specialized design firms (3990 industrial designers) engineering and architectural firms (2510) management scientific and technical consulting firms (380) and scientific RampD firms (300)
3) Michigan Rhode Island Wisconsin Indiana and Pennsylvania are the top five states by percentage of industrial designers in the workforcen Four out of the top five metropolitan areas by concentration of industrial
designers in the workforce are in Michigan Topping the list is the exceptionmdashKokomo Indiana also an automotive manufacturing site
n California and Michigan each employ more than 3000 industrial designers Both states host major hubs of auto design (eg the GM Technical Center in Warren Michigan and the BMW Design Works and the Volvo Monitoring and Concept Center in Ventura County California)
n Industrial designers in Michigan earn an average salary of $69870 a year or $10000 more than the national average for this occupation Industrial designers in Silicon Valley are also among the nationrsquos best-paid industrial designers
6 Architects and landscape architects fall into a different occupational category than designers so are excluded from this comparison
Valuing the Art of Industrial Design | 9
4) Over the next several years a growing number of industrial designers will find work in the professional services sector (eg engineering firms and specialized design firms)n Industrial designer employment in this sector is projected to leap by 29
percent
n Manufacturers will continue to employ the greatest share of salaried industrial designers Yet projected declines in manufacturing employment overall will trim the number of industrial designers in this sector
n Continued growth is projected for overall employment of industrial designers though the growth rate (+105 percent from 2010 to 2020) is somewhat lower than for all occupations as a whole (+143 percent)
Section Two Industrial Design as a BusinessAs an industry industrial design refers to business establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of manufactured products Most findings in this section come from data collected by the US Census Bureau
1) There are 1579 industrial design business establishments in the US with a total annual payroll of approximately $14 billionn In 2007 the most recent year for which such data are available industrial
design firms earned more than $15 billion in total revenue About 94 percent came from sales of product design model design and fabrication and other industrial design services
n Other revenue came from clothing and graphic design and drafting and other specialized services among other sources
n Roughly 14 percent (218) of all industrial design firms earned about $113 million by exporting their services The sales accounted for roughly one-fourth of these firmsrsquo total revenue ($468 million)
2) Total revenues earned by the industrial design industry are highly concentrated among the largest firmsn The four largest industrial design firms generate 11 percent of the industryrsquos
total revenue the 20 largest 32 percent and the 50 largest 45 percent7
n By contrast the professional services sector as a wholemdashof which industrial design is a partmdashrelies far less on larger firms The 50 largest firms in the sector generate only 18 percent of its total revenue
7 Although the US Census Bureau is barred from reporting data on individual establishments industry news reports suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 5
Historically industrial design has been a field of invention driven by market demand or clients Today there are many examples of designers pursuing clientless endeavors some have even been on display at the Museum of Modern Art in New York These artists probably would self-identify as industrial designers their contributions to developing clientless work as an art form is an acknowledged practice but one not quantifiable from the datasets explored in this report
Furthermore industrial designers are applying their skills to projects that achieve a broader social impact for populations that cannot afford to hire a designer directly1 For example Design that Matters is a 501(c)(3) nonprofit that ldquocreates new products that allow social enterprises in developing countries to offer improved services and scale more quicklyrdquo2 Design that Matters works with industrial designers manufacturers and other nongovernmental organizations to develop scalable products that serve low-resource communities around the globe Winner of the 2012 National Design Award for Corporate amp Institutional Achievement Design that Matters is developing product innovations within the nonprofit sector for significant impact One such innovation is an affordable phototherapy device to treat jaundiced newborns in South Asian and Sub-Saharan Africa
Postsecondary educational programs are retooling their curricula to reflect these more fluid approaches to industrial design Bachelorrsquos and masterrsquos programs in industrial design reflect the interdisciplinary nature of industrial design work Course curriculums at leading design institutions include anthropology systems design and entrepreneurship in addition to the traditional manufacturing and design studio course requirements Universities are also developing hybrid programs that apply design thinking to business and other fields of practice Professionals trained in these postsecondary programs might find themselves working for a company where their creative skills are engaged and applied to client-driven work or systems improvement The cross-disciplinary training and expanded professional role of industrial design thus make it difficult to assess the field conclusively by examining federal datasets alone
Designers as Inventors This research report sheds light on the significant role that designers play in invention of new products and services Creativity often begets innovation and invention According to data from the US Patent and Trademark Office approximately 40 percent of inventors named on design patents were also named on utility patents In contrast among all inventors named on utility patents only 2 percent were named on design patents
1 In 2012 the National Endowment for the Arts Smithsonianrsquos Cooper-Hewitt National Design Museum and Lemelson Foundation released a white paper ldquoDesign and Social Impactrdquo httpwwwneagovpubDesign-and-Social-Impactpdf
2 httpwwwdesignthatmattersorg
6 | Preface
These data demonstrate that designers are not only crafting new or improved visual ornamental designs for productsmdashthey are simultaneously inventing the new and useful products and processes themselves While this report quantifies the number of design patents obtained annually it can be challenging to identify the design firm or individual responsible for crafting a new product design Most often patents are assigned to the manufacturer or client company that commissions the design work While industrial designers may be the ones inventing new products their work is typically client-driven with the client organization becoming the patent assignee Nevertheless there is no doubt that designers play a crucial role in driving the creative process that results in new inventions or ornamental designs
Designers are also pursuing their creative process and new product designs through entrepreneurial ventures While most of the data here account for industrial design establishments and industrial designers on payroll many designers innovate products outside a formal business establishment In 2011 $92 million was pledged on Kickstarter to support design projects and 319 successful projects were funded3 Since their launch in 2009 4424 design projects have been launched on Kickstarter with a request for $877 million4 Browsing the posted projects in the design category reveals that the majority of proposals are for product design New funding platforms such as Kickstarter have enabled entrepreneurial designers to obtain capital to explore conceptual ideas and realize new inventions
Ultimately design is a tool to inspire innovation and influence systems change Industrial designers are creative professionals who are doing just that While we are unable to capture all the facets of the industrial design field in this research report we acknowledge the breadth of the field and the ever-expanding role of industrial designers as creative professionals who spark innovation commercial products and positive change The NEA report begins to quantify the role of industrial designers in the US economy and should provoke a more sustained and comprehensive inquiry about the importance of industrial design as a field
Jason Schupbach Director of DesignJennifer Hughes Design Specialist National Endowment for the Arts
3 httpwwwkickstartercomblog2011-the-stats
4 httpwwwkickstartercomhelpstats (Data retrieved June 25 2013)
Valuing the Art of Industrial Design | 7
Introduction For nearly four decades the National Endowment for the Arts has used federally collected data to portray the demographic and financial characteristics of artists as workers Designers have always been a vital segment of that population accounting for nearly 40 percent (about 830000) of all artists the largest share for any single artist occupation The category is broad and it includes fashion floral graphic interior and set designers as well as merchandise displayers It also includes commercial and industrial designers the subject of this report
The NEA has not previously attempted to provide in-depth information about the subgroups of occupations that make up the design field But the availability of such data from the US Bureau of Labor Statisticsmdashspecifically through a collaboration with state workforce agenciesmdashmakes a detailed rendering possible When it comes to understanding designers in the context of the industries that employ them moreover another federal statistical agency can be consulted the US Census Bureau
By using a combination of occupational and industry statistics this report enumerates industrial designers as workers the sectors that hire them the earnings of industrial designers and firms and the states and metropolitan areas where industrial design workers and industries are most prevalent
Why do we seek a baseline understanding of industrial design as a field Part of the answer lies in the reward of creating new knowledge As much research demonstrates artists as a whole show great fluidity when it comes to standard categories of employment They typically rely upon multiple jobs a combination of part-time and full-time work and they move with ease across the for-profit and nonprofit sectors Their portfolio careers while rich and diverse can prove difficult to track consistently for a clear picture of artistsrsquo contributions to the US economy
With industrial design as perhaps with design more generally a further challenge besets cultural researchers Industrial design is the handmaiden to a wide range of commercial industries To appreciate the full impact of industrial design workers and their businesses it is not enough to view this cohort in isolation One must trace the relationship of design to product manufacturing and to architectural and engineering firms and a host of other service industries This exercise is especially worthy at a time when a growing segment of the American public wants to know exactly where the arts can be found in manufacturing technology and product innovation
As for innovation this report uses a third federal data sourcemdashthe US Patent and Trademark Officemdashto represent designers as inventors The report thus addresses a specific ldquonoderdquo on the system map that accompanies the NEArsquos five-year research agenda set forth in the publication How Art Works (2011)5 That research topic is titled ldquoSocietal Capacities to Innovate and to Express Ideasrdquo The present analysis of the industrial design field allows us better to quantify this elusive component of the US arts ecosystem
Sunil Iyengar Director of Research amp Analysis National Endowment for the Arts
5 httpwwwneagovresearchHow-Art-Works
8 | Executive Summary
Executive Summary
Section One Industrial Design as an OccupationIndustrial designers also known as commercial designers develop the concepts for a variety of manufactured projects Most findings in this section come from data collected by the US Bureau of Labor Statistics
1) There are more than 40000 industrial designers in the United Statesn Thirty percent or approximately 12000 industrial designers are
self-employed This share is comparable to that for all artists (34 percent) but more than four times greater than the self-employment rate of all US workers (7 percent)
n Among salaried workers industrial designers number less than graphic designers (191440) merchandise-display designers (73490) floral designers (47110) and interior designers (40750)mdashbut they earn more than most design workers6
2) Most salaried industrial designers fall into one of two sectors manufacturing (11730 workers) or professional scientific and technical services (7570 workers)n Transportation equipment manufacturing (makers of auto and aerospace
parts and vehicles) is one of the best-paying industries for industrial designers The industry employs about 20 percent of all industrial designers in manufacturing
n The professional services sector includes a range of industries Among those retaining industrial designers on staff are specialized design firms (3990 industrial designers) engineering and architectural firms (2510) management scientific and technical consulting firms (380) and scientific RampD firms (300)
3) Michigan Rhode Island Wisconsin Indiana and Pennsylvania are the top five states by percentage of industrial designers in the workforcen Four out of the top five metropolitan areas by concentration of industrial
designers in the workforce are in Michigan Topping the list is the exceptionmdashKokomo Indiana also an automotive manufacturing site
n California and Michigan each employ more than 3000 industrial designers Both states host major hubs of auto design (eg the GM Technical Center in Warren Michigan and the BMW Design Works and the Volvo Monitoring and Concept Center in Ventura County California)
n Industrial designers in Michigan earn an average salary of $69870 a year or $10000 more than the national average for this occupation Industrial designers in Silicon Valley are also among the nationrsquos best-paid industrial designers
6 Architects and landscape architects fall into a different occupational category than designers so are excluded from this comparison
Valuing the Art of Industrial Design | 9
4) Over the next several years a growing number of industrial designers will find work in the professional services sector (eg engineering firms and specialized design firms)n Industrial designer employment in this sector is projected to leap by 29
percent
n Manufacturers will continue to employ the greatest share of salaried industrial designers Yet projected declines in manufacturing employment overall will trim the number of industrial designers in this sector
n Continued growth is projected for overall employment of industrial designers though the growth rate (+105 percent from 2010 to 2020) is somewhat lower than for all occupations as a whole (+143 percent)
Section Two Industrial Design as a BusinessAs an industry industrial design refers to business establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of manufactured products Most findings in this section come from data collected by the US Census Bureau
1) There are 1579 industrial design business establishments in the US with a total annual payroll of approximately $14 billionn In 2007 the most recent year for which such data are available industrial
design firms earned more than $15 billion in total revenue About 94 percent came from sales of product design model design and fabrication and other industrial design services
n Other revenue came from clothing and graphic design and drafting and other specialized services among other sources
n Roughly 14 percent (218) of all industrial design firms earned about $113 million by exporting their services The sales accounted for roughly one-fourth of these firmsrsquo total revenue ($468 million)
2) Total revenues earned by the industrial design industry are highly concentrated among the largest firmsn The four largest industrial design firms generate 11 percent of the industryrsquos
total revenue the 20 largest 32 percent and the 50 largest 45 percent7
n By contrast the professional services sector as a wholemdashof which industrial design is a partmdashrelies far less on larger firms The 50 largest firms in the sector generate only 18 percent of its total revenue
7 Although the US Census Bureau is barred from reporting data on individual establishments industry news reports suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
6 | Preface
These data demonstrate that designers are not only crafting new or improved visual ornamental designs for productsmdashthey are simultaneously inventing the new and useful products and processes themselves While this report quantifies the number of design patents obtained annually it can be challenging to identify the design firm or individual responsible for crafting a new product design Most often patents are assigned to the manufacturer or client company that commissions the design work While industrial designers may be the ones inventing new products their work is typically client-driven with the client organization becoming the patent assignee Nevertheless there is no doubt that designers play a crucial role in driving the creative process that results in new inventions or ornamental designs
Designers are also pursuing their creative process and new product designs through entrepreneurial ventures While most of the data here account for industrial design establishments and industrial designers on payroll many designers innovate products outside a formal business establishment In 2011 $92 million was pledged on Kickstarter to support design projects and 319 successful projects were funded3 Since their launch in 2009 4424 design projects have been launched on Kickstarter with a request for $877 million4 Browsing the posted projects in the design category reveals that the majority of proposals are for product design New funding platforms such as Kickstarter have enabled entrepreneurial designers to obtain capital to explore conceptual ideas and realize new inventions
Ultimately design is a tool to inspire innovation and influence systems change Industrial designers are creative professionals who are doing just that While we are unable to capture all the facets of the industrial design field in this research report we acknowledge the breadth of the field and the ever-expanding role of industrial designers as creative professionals who spark innovation commercial products and positive change The NEA report begins to quantify the role of industrial designers in the US economy and should provoke a more sustained and comprehensive inquiry about the importance of industrial design as a field
Jason Schupbach Director of DesignJennifer Hughes Design Specialist National Endowment for the Arts
3 httpwwwkickstartercomblog2011-the-stats
4 httpwwwkickstartercomhelpstats (Data retrieved June 25 2013)
Valuing the Art of Industrial Design | 7
Introduction For nearly four decades the National Endowment for the Arts has used federally collected data to portray the demographic and financial characteristics of artists as workers Designers have always been a vital segment of that population accounting for nearly 40 percent (about 830000) of all artists the largest share for any single artist occupation The category is broad and it includes fashion floral graphic interior and set designers as well as merchandise displayers It also includes commercial and industrial designers the subject of this report
The NEA has not previously attempted to provide in-depth information about the subgroups of occupations that make up the design field But the availability of such data from the US Bureau of Labor Statisticsmdashspecifically through a collaboration with state workforce agenciesmdashmakes a detailed rendering possible When it comes to understanding designers in the context of the industries that employ them moreover another federal statistical agency can be consulted the US Census Bureau
By using a combination of occupational and industry statistics this report enumerates industrial designers as workers the sectors that hire them the earnings of industrial designers and firms and the states and metropolitan areas where industrial design workers and industries are most prevalent
Why do we seek a baseline understanding of industrial design as a field Part of the answer lies in the reward of creating new knowledge As much research demonstrates artists as a whole show great fluidity when it comes to standard categories of employment They typically rely upon multiple jobs a combination of part-time and full-time work and they move with ease across the for-profit and nonprofit sectors Their portfolio careers while rich and diverse can prove difficult to track consistently for a clear picture of artistsrsquo contributions to the US economy
With industrial design as perhaps with design more generally a further challenge besets cultural researchers Industrial design is the handmaiden to a wide range of commercial industries To appreciate the full impact of industrial design workers and their businesses it is not enough to view this cohort in isolation One must trace the relationship of design to product manufacturing and to architectural and engineering firms and a host of other service industries This exercise is especially worthy at a time when a growing segment of the American public wants to know exactly where the arts can be found in manufacturing technology and product innovation
As for innovation this report uses a third federal data sourcemdashthe US Patent and Trademark Officemdashto represent designers as inventors The report thus addresses a specific ldquonoderdquo on the system map that accompanies the NEArsquos five-year research agenda set forth in the publication How Art Works (2011)5 That research topic is titled ldquoSocietal Capacities to Innovate and to Express Ideasrdquo The present analysis of the industrial design field allows us better to quantify this elusive component of the US arts ecosystem
Sunil Iyengar Director of Research amp Analysis National Endowment for the Arts
5 httpwwwneagovresearchHow-Art-Works
8 | Executive Summary
Executive Summary
Section One Industrial Design as an OccupationIndustrial designers also known as commercial designers develop the concepts for a variety of manufactured projects Most findings in this section come from data collected by the US Bureau of Labor Statistics
1) There are more than 40000 industrial designers in the United Statesn Thirty percent or approximately 12000 industrial designers are
self-employed This share is comparable to that for all artists (34 percent) but more than four times greater than the self-employment rate of all US workers (7 percent)
n Among salaried workers industrial designers number less than graphic designers (191440) merchandise-display designers (73490) floral designers (47110) and interior designers (40750)mdashbut they earn more than most design workers6
2) Most salaried industrial designers fall into one of two sectors manufacturing (11730 workers) or professional scientific and technical services (7570 workers)n Transportation equipment manufacturing (makers of auto and aerospace
parts and vehicles) is one of the best-paying industries for industrial designers The industry employs about 20 percent of all industrial designers in manufacturing
n The professional services sector includes a range of industries Among those retaining industrial designers on staff are specialized design firms (3990 industrial designers) engineering and architectural firms (2510) management scientific and technical consulting firms (380) and scientific RampD firms (300)
3) Michigan Rhode Island Wisconsin Indiana and Pennsylvania are the top five states by percentage of industrial designers in the workforcen Four out of the top five metropolitan areas by concentration of industrial
designers in the workforce are in Michigan Topping the list is the exceptionmdashKokomo Indiana also an automotive manufacturing site
n California and Michigan each employ more than 3000 industrial designers Both states host major hubs of auto design (eg the GM Technical Center in Warren Michigan and the BMW Design Works and the Volvo Monitoring and Concept Center in Ventura County California)
n Industrial designers in Michigan earn an average salary of $69870 a year or $10000 more than the national average for this occupation Industrial designers in Silicon Valley are also among the nationrsquos best-paid industrial designers
6 Architects and landscape architects fall into a different occupational category than designers so are excluded from this comparison
Valuing the Art of Industrial Design | 9
4) Over the next several years a growing number of industrial designers will find work in the professional services sector (eg engineering firms and specialized design firms)n Industrial designer employment in this sector is projected to leap by 29
percent
n Manufacturers will continue to employ the greatest share of salaried industrial designers Yet projected declines in manufacturing employment overall will trim the number of industrial designers in this sector
n Continued growth is projected for overall employment of industrial designers though the growth rate (+105 percent from 2010 to 2020) is somewhat lower than for all occupations as a whole (+143 percent)
Section Two Industrial Design as a BusinessAs an industry industrial design refers to business establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of manufactured products Most findings in this section come from data collected by the US Census Bureau
1) There are 1579 industrial design business establishments in the US with a total annual payroll of approximately $14 billionn In 2007 the most recent year for which such data are available industrial
design firms earned more than $15 billion in total revenue About 94 percent came from sales of product design model design and fabrication and other industrial design services
n Other revenue came from clothing and graphic design and drafting and other specialized services among other sources
n Roughly 14 percent (218) of all industrial design firms earned about $113 million by exporting their services The sales accounted for roughly one-fourth of these firmsrsquo total revenue ($468 million)
2) Total revenues earned by the industrial design industry are highly concentrated among the largest firmsn The four largest industrial design firms generate 11 percent of the industryrsquos
total revenue the 20 largest 32 percent and the 50 largest 45 percent7
n By contrast the professional services sector as a wholemdashof which industrial design is a partmdashrelies far less on larger firms The 50 largest firms in the sector generate only 18 percent of its total revenue
7 Although the US Census Bureau is barred from reporting data on individual establishments industry news reports suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 7
Introduction For nearly four decades the National Endowment for the Arts has used federally collected data to portray the demographic and financial characteristics of artists as workers Designers have always been a vital segment of that population accounting for nearly 40 percent (about 830000) of all artists the largest share for any single artist occupation The category is broad and it includes fashion floral graphic interior and set designers as well as merchandise displayers It also includes commercial and industrial designers the subject of this report
The NEA has not previously attempted to provide in-depth information about the subgroups of occupations that make up the design field But the availability of such data from the US Bureau of Labor Statisticsmdashspecifically through a collaboration with state workforce agenciesmdashmakes a detailed rendering possible When it comes to understanding designers in the context of the industries that employ them moreover another federal statistical agency can be consulted the US Census Bureau
By using a combination of occupational and industry statistics this report enumerates industrial designers as workers the sectors that hire them the earnings of industrial designers and firms and the states and metropolitan areas where industrial design workers and industries are most prevalent
Why do we seek a baseline understanding of industrial design as a field Part of the answer lies in the reward of creating new knowledge As much research demonstrates artists as a whole show great fluidity when it comes to standard categories of employment They typically rely upon multiple jobs a combination of part-time and full-time work and they move with ease across the for-profit and nonprofit sectors Their portfolio careers while rich and diverse can prove difficult to track consistently for a clear picture of artistsrsquo contributions to the US economy
With industrial design as perhaps with design more generally a further challenge besets cultural researchers Industrial design is the handmaiden to a wide range of commercial industries To appreciate the full impact of industrial design workers and their businesses it is not enough to view this cohort in isolation One must trace the relationship of design to product manufacturing and to architectural and engineering firms and a host of other service industries This exercise is especially worthy at a time when a growing segment of the American public wants to know exactly where the arts can be found in manufacturing technology and product innovation
As for innovation this report uses a third federal data sourcemdashthe US Patent and Trademark Officemdashto represent designers as inventors The report thus addresses a specific ldquonoderdquo on the system map that accompanies the NEArsquos five-year research agenda set forth in the publication How Art Works (2011)5 That research topic is titled ldquoSocietal Capacities to Innovate and to Express Ideasrdquo The present analysis of the industrial design field allows us better to quantify this elusive component of the US arts ecosystem
Sunil Iyengar Director of Research amp Analysis National Endowment for the Arts
5 httpwwwneagovresearchHow-Art-Works
8 | Executive Summary
Executive Summary
Section One Industrial Design as an OccupationIndustrial designers also known as commercial designers develop the concepts for a variety of manufactured projects Most findings in this section come from data collected by the US Bureau of Labor Statistics
1) There are more than 40000 industrial designers in the United Statesn Thirty percent or approximately 12000 industrial designers are
self-employed This share is comparable to that for all artists (34 percent) but more than four times greater than the self-employment rate of all US workers (7 percent)
n Among salaried workers industrial designers number less than graphic designers (191440) merchandise-display designers (73490) floral designers (47110) and interior designers (40750)mdashbut they earn more than most design workers6
2) Most salaried industrial designers fall into one of two sectors manufacturing (11730 workers) or professional scientific and technical services (7570 workers)n Transportation equipment manufacturing (makers of auto and aerospace
parts and vehicles) is one of the best-paying industries for industrial designers The industry employs about 20 percent of all industrial designers in manufacturing
n The professional services sector includes a range of industries Among those retaining industrial designers on staff are specialized design firms (3990 industrial designers) engineering and architectural firms (2510) management scientific and technical consulting firms (380) and scientific RampD firms (300)
3) Michigan Rhode Island Wisconsin Indiana and Pennsylvania are the top five states by percentage of industrial designers in the workforcen Four out of the top five metropolitan areas by concentration of industrial
designers in the workforce are in Michigan Topping the list is the exceptionmdashKokomo Indiana also an automotive manufacturing site
n California and Michigan each employ more than 3000 industrial designers Both states host major hubs of auto design (eg the GM Technical Center in Warren Michigan and the BMW Design Works and the Volvo Monitoring and Concept Center in Ventura County California)
n Industrial designers in Michigan earn an average salary of $69870 a year or $10000 more than the national average for this occupation Industrial designers in Silicon Valley are also among the nationrsquos best-paid industrial designers
6 Architects and landscape architects fall into a different occupational category than designers so are excluded from this comparison
Valuing the Art of Industrial Design | 9
4) Over the next several years a growing number of industrial designers will find work in the professional services sector (eg engineering firms and specialized design firms)n Industrial designer employment in this sector is projected to leap by 29
percent
n Manufacturers will continue to employ the greatest share of salaried industrial designers Yet projected declines in manufacturing employment overall will trim the number of industrial designers in this sector
n Continued growth is projected for overall employment of industrial designers though the growth rate (+105 percent from 2010 to 2020) is somewhat lower than for all occupations as a whole (+143 percent)
Section Two Industrial Design as a BusinessAs an industry industrial design refers to business establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of manufactured products Most findings in this section come from data collected by the US Census Bureau
1) There are 1579 industrial design business establishments in the US with a total annual payroll of approximately $14 billionn In 2007 the most recent year for which such data are available industrial
design firms earned more than $15 billion in total revenue About 94 percent came from sales of product design model design and fabrication and other industrial design services
n Other revenue came from clothing and graphic design and drafting and other specialized services among other sources
n Roughly 14 percent (218) of all industrial design firms earned about $113 million by exporting their services The sales accounted for roughly one-fourth of these firmsrsquo total revenue ($468 million)
2) Total revenues earned by the industrial design industry are highly concentrated among the largest firmsn The four largest industrial design firms generate 11 percent of the industryrsquos
total revenue the 20 largest 32 percent and the 50 largest 45 percent7
n By contrast the professional services sector as a wholemdashof which industrial design is a partmdashrelies far less on larger firms The 50 largest firms in the sector generate only 18 percent of its total revenue
7 Although the US Census Bureau is barred from reporting data on individual establishments industry news reports suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
8 | Executive Summary
Executive Summary
Section One Industrial Design as an OccupationIndustrial designers also known as commercial designers develop the concepts for a variety of manufactured projects Most findings in this section come from data collected by the US Bureau of Labor Statistics
1) There are more than 40000 industrial designers in the United Statesn Thirty percent or approximately 12000 industrial designers are
self-employed This share is comparable to that for all artists (34 percent) but more than four times greater than the self-employment rate of all US workers (7 percent)
n Among salaried workers industrial designers number less than graphic designers (191440) merchandise-display designers (73490) floral designers (47110) and interior designers (40750)mdashbut they earn more than most design workers6
2) Most salaried industrial designers fall into one of two sectors manufacturing (11730 workers) or professional scientific and technical services (7570 workers)n Transportation equipment manufacturing (makers of auto and aerospace
parts and vehicles) is one of the best-paying industries for industrial designers The industry employs about 20 percent of all industrial designers in manufacturing
n The professional services sector includes a range of industries Among those retaining industrial designers on staff are specialized design firms (3990 industrial designers) engineering and architectural firms (2510) management scientific and technical consulting firms (380) and scientific RampD firms (300)
3) Michigan Rhode Island Wisconsin Indiana and Pennsylvania are the top five states by percentage of industrial designers in the workforcen Four out of the top five metropolitan areas by concentration of industrial
designers in the workforce are in Michigan Topping the list is the exceptionmdashKokomo Indiana also an automotive manufacturing site
n California and Michigan each employ more than 3000 industrial designers Both states host major hubs of auto design (eg the GM Technical Center in Warren Michigan and the BMW Design Works and the Volvo Monitoring and Concept Center in Ventura County California)
n Industrial designers in Michigan earn an average salary of $69870 a year or $10000 more than the national average for this occupation Industrial designers in Silicon Valley are also among the nationrsquos best-paid industrial designers
6 Architects and landscape architects fall into a different occupational category than designers so are excluded from this comparison
Valuing the Art of Industrial Design | 9
4) Over the next several years a growing number of industrial designers will find work in the professional services sector (eg engineering firms and specialized design firms)n Industrial designer employment in this sector is projected to leap by 29
percent
n Manufacturers will continue to employ the greatest share of salaried industrial designers Yet projected declines in manufacturing employment overall will trim the number of industrial designers in this sector
n Continued growth is projected for overall employment of industrial designers though the growth rate (+105 percent from 2010 to 2020) is somewhat lower than for all occupations as a whole (+143 percent)
Section Two Industrial Design as a BusinessAs an industry industrial design refers to business establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of manufactured products Most findings in this section come from data collected by the US Census Bureau
1) There are 1579 industrial design business establishments in the US with a total annual payroll of approximately $14 billionn In 2007 the most recent year for which such data are available industrial
design firms earned more than $15 billion in total revenue About 94 percent came from sales of product design model design and fabrication and other industrial design services
n Other revenue came from clothing and graphic design and drafting and other specialized services among other sources
n Roughly 14 percent (218) of all industrial design firms earned about $113 million by exporting their services The sales accounted for roughly one-fourth of these firmsrsquo total revenue ($468 million)
2) Total revenues earned by the industrial design industry are highly concentrated among the largest firmsn The four largest industrial design firms generate 11 percent of the industryrsquos
total revenue the 20 largest 32 percent and the 50 largest 45 percent7
n By contrast the professional services sector as a wholemdashof which industrial design is a partmdashrelies far less on larger firms The 50 largest firms in the sector generate only 18 percent of its total revenue
7 Although the US Census Bureau is barred from reporting data on individual establishments industry news reports suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 9
4) Over the next several years a growing number of industrial designers will find work in the professional services sector (eg engineering firms and specialized design firms)n Industrial designer employment in this sector is projected to leap by 29
percent
n Manufacturers will continue to employ the greatest share of salaried industrial designers Yet projected declines in manufacturing employment overall will trim the number of industrial designers in this sector
n Continued growth is projected for overall employment of industrial designers though the growth rate (+105 percent from 2010 to 2020) is somewhat lower than for all occupations as a whole (+143 percent)
Section Two Industrial Design as a BusinessAs an industry industrial design refers to business establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of manufactured products Most findings in this section come from data collected by the US Census Bureau
1) There are 1579 industrial design business establishments in the US with a total annual payroll of approximately $14 billionn In 2007 the most recent year for which such data are available industrial
design firms earned more than $15 billion in total revenue About 94 percent came from sales of product design model design and fabrication and other industrial design services
n Other revenue came from clothing and graphic design and drafting and other specialized services among other sources
n Roughly 14 percent (218) of all industrial design firms earned about $113 million by exporting their services The sales accounted for roughly one-fourth of these firmsrsquo total revenue ($468 million)
2) Total revenues earned by the industrial design industry are highly concentrated among the largest firmsn The four largest industrial design firms generate 11 percent of the industryrsquos
total revenue the 20 largest 32 percent and the 50 largest 45 percent7
n By contrast the professional services sector as a wholemdashof which industrial design is a partmdashrelies far less on larger firms The 50 largest firms in the sector generate only 18 percent of its total revenue
7 Although the US Census Bureau is barred from reporting data on individual establishments industry news reports suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
10 | Executive Summary
3) Rhode Island Oregon Michigan New York and California rank in the top five states by per-capita concentration of industrial design firms But a ranking by sheer number of such firms would exclude Rhode Island and Oregon and include Florida and Illinoisn Rhode Islandrsquos industrial design firms cluster around Providencersquos Rhode
Island School of Design (RISD)
n Ranked by payroll size of industrial design firms the top five states are California New York Ohio Illinois and Texas In California annual payroll of industrial design firms (just under $240 million) is more than twice that of New Yorkrsquos industrial design industry
n The top metro area ranked by concentration of industrial design firms per capita is Greensboro-High Point North Carolinamdashoften called the ldquoFurniture Capital of the Worldrdquo North Carolina is home to many well-known manufacturers of furniture such as Thomasville Bernhardt and Broyhill which are also the top three ldquoassigneesrdquo of North Carolinarsquos design patents
Section Three Industrial Design as a Product InnovatorDesign patents protect the visual characteristics embodied in or applied to an article A utility patent protects the way an article is used and works while a design patent protects the way an article looks Most findings in this section come from data collected by the US Patent and Trademark Office (USPTO)
1) The number of US-awarded design patents per 100000 population is at an all-time high seven in 2012 compared with one at the turn of the 20th centuryn Historical data show two growth spurts for US-awarded design patents
1910 through the mid-1940s and the late 1980s through the present date
n Amid the last economic recession growth in design patents slowed in 2008 and fell by nearly 10 percent the following year
2) Between 1998 and 2012 the US Patent and Trademark Office awarded 165108 design patents (12445 in 2012 alone) to US companies and individuals n More than half of design patents (54 percent) awarded in 1998ndash2012 fall
in eight classes ndash furnishings ndash recordings communication or informational retrieval equipment ndash tools and hardware ndash packages and containers for goods ndash equipment for preparing or serving food or drink ndash transportation ndash environmental heating and cooling or fluid handling ndash games toys or sports goods
n One out of five of all US design patents protect the unique external appearance of furnishings or systems used for recording communication or information retrieval (eg smart phones computer icons and computer keyboards)
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 11
3) Forty-five percent of design patents are awarded to US companies and 32 percent to foreign firms The remainder are awarded mostly to US individualsn The top ten US companies by number of industrial design patents
awarded are ndash Microsoft ndash Procter amp Gamble ndash Nike ndash Goodyear ndash Black amp Decker ndash Wolverine World Wide ndash Kohler Company ndash Apple ndash 3M ndash Ford
n The top ten foreign companies by number of industrial design patents awarded are
ndash Samsung ndash Sony ndash Foxconn ndash LG Electronics ndash Panasonic ndash Honda ndash Nokia ndash Toyota ndash Toshiba ndash Canon
n The top ten US states by industrial design patents awarded per capita are ndash Washington ndash Wisconsin ndash Oregon ndash Rhode Island ndash California ndash Minnesota-Ohio ndash Illinois ndash Massachusetts ndash New York ndash Michigan
4) Industrial designers are also inventorsn In an analysis of US patents awarded between 1975 and 2010 Alan
Marco the USPTOrsquos acting chief economist has found that 40 percent of people named on design patents (ldquodesignersrdquo) over that period (55000 out of 136000) were also named on utility patents By contrast among the 25 million people named on utility patents (ldquoinventorsrdquo) over the same period only 2 percent were named on design patents
n Over the period studied the mean number of utility patents naming a designer-inventor (a person named on both a design and utility patent) was 73 By contrast the mean number of utility patents naming an inventor who had not been named on a design patent was 33
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Part 1 Industrial Design as an Occupation
1977 Chevrolet Corvette an example of industrial design in the automotive manufacturing industry Photo Courtesy of General Motors copy GM Corporation
In its 2012ndash2013 edition of the Occupational Outlook Handbook the US Bureau of Labor Statistics (BLS) reports that industrial designers also known as commercial designers develop the concepts for manufactured products such as cars home appliances and toys To varying degrees they combine art business and engineering to make products that people use every day
The following section draws from BLS data to profile trends in industrial design employment identify the sectors that employ the greatest numbers of industrial designers and rank earnings and concentration levels of such workers by state and metropolitan area
In 2010 there were 40800 industrial designers working in the US Roughly 30 percent were self-employedmdasha figure comparable to the self-employment rate for artists of all types (34 percent) By contrast only 7 percent of all US workers were self-employed
12 | Part 1 Industrial Design as an Occupation
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 13
Most of the findings presented in this section however concern the 70 percent of industrial designers who are ldquowage and salaried non-farm workersrdquo The data source is BLSrsquo Occupational Employment Statistics (OES) program which provides far more detailed occupational and industry data than other sources but which necessarily excludes self-employed workers8
Among all design occupations industrial designers are comparatively few in number In 2012 the most recent year for which OES data are available there were 29030 industrial designers (excluding self-employed workers) They thus make up a smaller number than do graphic designers (191440) merchandise display designers (73490) and floral designers (47110) Still industrial designers earn more than most workers in other design occupations (annual median wage $59610)9
It is worth noting that architecture and landscape architecturemdashtwo occupations whose skills and services may intersect with those of designersmdashare excluded from this comparison as each is defined separately from design in BLSrsquo occupational taxonomy10
Employment and Earnings by Design Occupations 2012
Number employed Annual median wages
Designers
Industrial 29030 $59610
Fashion 16560 $62860
Floral 47110 $23810
Graphic 191440 $44150
Interior 40750 $47600
Merchandise display 73490 $26410
Set and exhibit 8680 $50300
All others1 7560 $45330
Note Figures exclude self-employed designers
1 ldquoAll other designersrdquo include jewelry designers memorial designers and designers of ornamental metalwork
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Employment by IndustryIndustrial designers are concentrated in two sectors manufacturing and professional services In 2012 roughly 11700 industrial designers worked in manufacturing and 7600 in professional scientific and technical services which includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among other industries11 Combined manufacturing and professional services employ 65 percent of salaried workers in this occupation
Occupational Employment StatisticsOccupational Employment Statistics is a collaborative program between the BLS and state workforce agencies The OES surveys 200000 non-farm establishments every six months taking three years to fully collect the sample of 12 million establishments OES data are used to report employment and wage estimates for about 800 occupations at national state metropolitan and nonmetropolitan levels
The OES also reports employment and wage estimates by industry At the national level estimates are reported for 450 industries which are categorized by the North American Industry Classification System (NAICS)
8 Using data from the Current Population Survey the Bureau of Labor Statistics reports employment of 1315 million nonagricultural workers in 2012 Of these 87 million were self-employed
9 Industrial designers with a supervisory role can be classified as ldquomanagersrdquo in the OES system and therefore cannot be identified for the purpose of counting them as industrial designers
10 The OES program reports 98470 employed architects in 2012 Median annual earnings for architects were $71700
11 The sector employing the next highest number of industrial designers is wholesale trade ie the buying and selling of merchandise for distribution to retailers 3540 salaried industrial designers worked in this sector in 2012
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
14 | Part 1 Industrial Design as an Occupation
On the whole industrial designers working in manufacturing earn less than designers working in professional servicesmdash$56880 versus $63580 in 2012 This small difference fades however when transportation manufacturing is examined particularly motor vehicle manufacturing
In 2012 about 310 industrial designers worked in motor vehicle manufacturing The BLS withheld earnings data for these workers out of concern that information for such a small group might lead to public disclosure of businesses participating in the OES surveys Therefore to identify wages earned by industrial designers working in motor vehicle manufacturing we turn instead to prior-year OES data
In 2011 those jobs were far more numerous That year there were 800 industrial designers employed in motor vehicle manufacturing their median earnings were $89410mdash$28000 more than median earnings for all industrial designers (As will be shown later in this section the nearly 500-employee drop between 2011 and 2012 reflects a broader decline in employment across the auto manufacturing industry)
Other transportation-equipment manufacturing industries also pay well According to the 2012 OES data industrial designers working in aerospace product manufacturing earned an average of $7200012 Designers employed in the manufacture of motor vehicle parts which includes car seats interior trim and steering wheels earned median wages of $62930
Industrial Designer Employment by Sector 2012
Sector Number employed Annual median wages
Manufacturing 11730 $56880
Professional scientific and technical services 7570 $63580
Wholesale trade 3540 $51770
Retail trade 510 $50720
Administrative and support and waste management services
400 $60880
Construction 350 $56480
Information 230 $56980
Federal state and local government 210 $52510
Educational services 60
Transportation and warehousing 50 $53450
Arts entertainment and recreation 30 $63450
Management of companies na na
Other services $60350
Not reported by the Bureau of Labor Statistics
na Not reported in this table due to likely data anomaly
Detail by sector does not add to total employment of industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
12 The manufacture of aerospace products includes the design of airplane prototypes
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 15
Industrial Designer Employment by Selected Manufacturing Industries 2012
Manufacturing industry Number employed Annual median wages
Transportation equipment manufacturing 2430 $64470
Motor vehicle manufacturing 310
Motor vehicle body and trailer manufacturing 280 $58300
Motor vehicle parts manufacturing 1170 $62930
Aerospace product and parts manufacturing 360 $71780
Other transportation equipment manufacturing 120 $54520
Machinery manufacturing 1820 $53140
Plastics and rubber products manufacturing 990 $52650
Electrical equipment appliance and component manufacturing
810 $60680
Furniture and related product manufacturing 770 $48150
Computer and electronic product manufacturing 570 $67800
Jewelry and silverware manufacturing 380 $61120
Not reported by the Bureau of Labor Statistics in 2012 In 2011 that figure was $89410
Detail by sector does not add to total 11730 industrial designers are employed in manufacturing
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
In the professional services sector 85 percent of industrial designers are employed in two industriesmdashrdquospecialized design servicesrdquo and architectural or engineering services Of the two industries specialized design (which includes establishments that provide primarily industrial design services) employs a greater number of industrial designersmdashnearly 4000 in 2012
Architectural and engineering services alternatively employ fewer industrial designersmdashabout 2500 in 2012 Nearly all of those designers work in engineeringmdash2310 in 201213 Industrial designers working in architectural or engineering services earned about $10000 more than designers in the specialized design services industry
Industrial Designer Employment by Professional Services Industries 2012
Number employed Annual median wages
Specialized design services 3990 $58530
Architectural engineering and related services 2510 $69250
Computer systems design and related services $63020
Management scientific and technical consulting services
380 $67530
Scientific research and development services 300 $71500
Advertising public relations and related services $60280
Other professional scientific and technical services 40 $37660
Not reported by the Bureau of Labor Statistics
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
13 As outlined by US Census Bureau product codes engineering services firms design industrial machinery and manufacturing processes work that commonly involves industrial designers
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
16 | Part 1 Industrial Design as an Occupation
Projected Employment Growth 2010ndash2020The BLSrsquo Office of Employment Projections expects the number of employed industrial designers in the US to reach 45100 by 202014 This estimate which includes self-employed and wage-and-salary designers represents a 105 percent gain from the number of employed industrial designers in 2010 Although positive the growth rate projected for industrial designer employment is somewhat below the average growth rate of 143 percent forecast for all occupations15
The BLS projections call for wage-and-salary industrial designers to remain at 70 percent of all workers in that occupation with the remaining 30 percent continuing as self-employed Among salaried industrial designers employment is projected to rise to 31400 in 2020mdasha 99 percent gain from 2010 employment levels (Among non-salaried industrial designers employment is projected to rise by 12 percent to 13700 workers)
By sector the BLS projects more hiring of industrial designers in the ldquoprofessional servicesrdquo sector and reduced employment in manufacturing a pattern that coincides with the trend of long-term declines in overall manufacturing employment16 Despite this decline manufacturing is projected to remain the leading employer of industrial designers
In 2010 for example 7200 salaried industrial designers were employed by professional services By 2020 the BLS projects that number to rise by 285 percent to reach 9200 designers Most of this growth is expected to stem from increased hiring in the two professional services industries employing the greatest numbers of industrial designersmdasharchitectural and engineering services and specialized design services Between 2010 and 2020 both industries are projected to add between 800 and 1000 industrial designers to their payrolls
Industrial designer employment in manufacturing as stated earlier is projected to decline Between 2010 and 2020 the BLS calls for industrial designer employment in the manufacturing sector to fall from 11900 workers to 11500mdash a dip of 34 percent
14 BLS projections assume that the economy is at or near full employment
15 The average growth rate projected for all occupations reflects strong growth patterns for a variety of jobs Examples include occupations such as personal care and home health aides which serve aging populations and whose employment is projected to grow by 70 percent between 2010 and 2020 and carpenter helpers whose employment is expected to increase by more the 50 percent as the construction industry recovers from the severe 2007ndash2009 recession
16 An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing employed 17906 workers By 2012 that number fell to 11919 For more information see estimates produced by the BLSrsquo Current Employment Statistics program
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 17
Industrial Designer Employment in Selected Manufacturing and Professional Services Industries 2010 (Actual) and 2020 (Projected)
2010 2020 2010 ndash2020
Number employed Percent of occupation
Number employed Percent of occupation
Percentage change in employment
All industrial designers 40800 1000 45100 1000 +105
Self-employed 12200 300 13700 304 +120
Wage and salary workers 28600 700 31400 696 +99
Manufacturing 11900 292 11500 255 -34
Selected industries
Plastic products 1000 24 1200 26 +213
Machinery 1900 46 1800 40 -46
Computer and electronic products 500 13 500 10 -150
Transportation equipment (including motor vehicles and aerospace)
2300 55 2300 51 +17
Miscellaneous manufacturing 2000 50 1700 37 -190
Professional scientific and technical services 7200 176 9200 205 +285
Selected industries
Architectural engineering and related services
3200 79 4200 93 +298
Specialized design services 2800 70 3600 80 +271
Note The employment figures shown were taken from BLS estimates rounded to the nearest one-thousand Consequently percentage changes in employment are not necessarily evident in the employment figures
Source Office of Employment Projections Bureau of Labor Statistics US Department of Labor
Not all manufacturing industries are expected to cut industrial design jobsmdashthe manufacture of plastics for example is projected to add a modest number of industrial design jobs and transportation manufacturing is expected to employ about the same number of industrial designers in 2020 as it did in 2010 However the BLS projects industrial designer employment to decline in the manufacture of machinery and equipment computer and electronic products and ldquomiscellaneous manufacturingrdquo which includes a varied list of manufactured goods such as jewelry sporting goods and toys office supplies and musical instruments
As noted earlier manufacturing is projected to remain the largest employer of industrial designers despite a gradual reduction in the number of workers employed in this sector In 2020 manufacturing will continue to employ almost 37 percent of salaried industrial designers
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
18 | Part 1 Industrial Design as an Occupation
Wage-and-Salary Employment of Industrial Designers 1999 ndash2012 (Actual) and 2020 (Projected)
45000
40000
35000
30000
25000
20000
15000
10000
5000
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Wage-and-Salary Employment of Industrial Designers by Manufacturing and Selected Professional Services Industries 2004-2012 (Actual) and 2020 (Projected)
16000
14000
12000
10000
8000
6000
4000
2000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2020
Selected professional servicesManufacturing
Selected professional services consist of architectural and engineering services and specialized design services
Source Occupational Employment Statistics and Employment Projections Program US Bureau of Labor Statistics
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 19
ldquoOne Word PlasticsrdquoLower industrial-designer employment in manufacturing coincides with the trend of long-term declines in overall manufacturing employment An examination of the 25-year period from 1988 to 2012 reveals that employment in the manufacturing sector has steadily declined In 1988 for example manufacturing reported 17906 jobs By 2012 that number fell to 11919
Still specific manufacturing industries are projected to increase hiring For example between 2010 and 2020 the BLS expects plastic manufacturers to add 100000 jobs This increased hiring reflects the industry trying to stabilize following deep hiring cuts resulting from the 2007-2009 US recession In 2000 for example plastic manufacturers reported nearly 737000 jobs In 2010 that count dropped to fewer than 500000 jobs By 2020 the BLS expects employment in plastics manufacturing to pick up to almost 600000 positions
Construction industries were also hit hard by the recession Between 2000 and 2010 construction shed almost 13 million jobs But between 2010 and 2020 the BLS projects that construction will add 18 million jobs As construction recovers it is adding to the employment rosters of the architectural and engineering services industry and of the specialized design services industry both of which are projected to add industrial designer positions between 2010 and 2020
Education for Industrial DesignAccording to the US Bureau of Labor Statistics industrial designers naturally must have knowledge of design techniques But they might also need an understanding of engineering and technology production processes computers mathematics and even physics Because industrial designers often present their work to marketing staff and clients the occupation requires English language skills
A bachelorrsquos degree is required for most entry-level industrial design jobs As for degrees specific to industrial design the US Department of Educationrsquos National Center for Education Statistics (NCES) reports that US postsecondary schools awarded 1397 bachelorrsquos degrees in industrial design in 2011 the most recent year for which data are reported17 As a share of all bachelorrsquos degrees awarded industrial design has been just below 1 percent since 200318
Locations of Industrial DesignersThere are only two US states employing more than 3000 industrial designersmdashCalifornia and Michigan Michigan however far exceeds California in concentration of industrial designers In 2012 as a share of Michiganrsquos employed labor force industrial designers were nearly four times greater than the US average19 The ldquolocation quotientrdquo for Californiarsquos industrial designers alternatively was 106mdashas a share of all employed workers in California industrial designers were 6 percent greater than the US average
Ranked closely behind Michigan is Rhode Island In 2012 about 320 industrial designers were employed in Rhode Island Although Rhode Island is home to far fewer designers than California and Michigan industrial designers compose a large share of Rhode Islandrsquos workforce Relative to all workers in the state Rhode Islandrsquos industrial designers exceed the US average by a factor of three (See sidebar on page 31 for more about Rhode Islandrsquos industrial design industry)
17 Degrees conferred were based on NCESrsquo Integrated Postsecondary Education Data System or IPEDS The IPEDS collects information from every college university and technical and vocational school that participates in federal student financial aid programs IPEDS uses the Classification of Instructional Programs (CIP) to categorize degrees and certificates conferred Industrial design awards are classified as CIP 500404
18 156 masterrsquos degrees in industrial design were awarded in 2011 or about 002 percent of all masterrsquos degrees conferred The number of associatersquos degrees in industrial design is negligible (fewer than 100 since 2005)
19 The location quotient is the ratio of the area concentration of occupational employment to the national average concentration A location quotient greater than one indicates the occupation has a higher share of employment than average and a location quotient less than one indicates the occupation is less prevalent in the area than average
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
20 | Part 1 Industrial Design as an Occupation
As a share of all employed workers industrial designers in Wisconsin are twice the national average Workers in this occupation are also concentrated in Indiana Pennsylvania and Ohio where the location quotient for each state is roughly 15 or 50 percent greater than the national average20
States with the Highest Concentrations of Industrial Designers 2012
Employed industrial designers
Location quotient
Michigan 3280 375
Rhode Island 320 319
Wisconsin 1800 198
Indiana 990 157
Pennsylvania 1880 151
Ohio 1640 146
Illinois 1730 138
Iowa 360 109
Massachusetts 780 109
California 3370 106
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Earnings by StateNot only is Michigan home to large numbers of industrial designers it also leads in best-paid industrial designers21 In 2012 Michiganrsquos industrial designers earned about $10000 more than the average earned by all US industrial designers Moreover Michiganrsquos designers earned a premium of $35500 above the wages paid to all workers in the state whose annual earnings averaged $34750 comparable to the average earned by all US workers
Contributing to this finding is Michiganrsquos motor vehicle manufacturing industry As discussed earlier motor vehicle manufacturing and related industries such as the manufacture of motor vehicle parts are among the best-paying industries employing industrial designers (The US Census Bureaursquos County Business Pattern data show that the largest annual payroll in motor vehicle manufacturing was in Michiganmdash$2 billion in 2011)
Highly paid industrial designers are also found in Oregon and New York whose 2012 earnings were $69080 and $67650 respectively As discussed in later sections of this report Oregon and New York like Michigan are home to large numbers of industrial design firms
20 The location quotient for industrial designers in Vermont is also highmdash241 in 2012 This high quotient stems less from the number of industrial designers in Vermont (160) than from Vermontrsquos small number of employed workers (294090 in 2012)
21 Industrial designers in New Mexico earned a median annual income of $82040 in 2012 according to OES data This unusually high estimate however likely resulted from the small number of establishments from New Mexico reporting to the OES program which may have skewed the sample for that state In this publication therefore the estimate for New Mexicorsquos high median annual earnings is discounted
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 21
States with the Best-Paid Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Michigan 3280 $69870 $34370 $35500
Oregon 200 $69080 $35650 $33430
South Carolina 390 $68420 $30210 $38210
New York 1810 $67650 $39910 $27740
District of Columbia 30 $67480 $61960 $5520
Massachusetts 780 $65710 $43420 $22290
Connecticut 250 $64400 $42030 $22370
New Jersey 860 $64160 $39870 $24290
New Hampshire 80 $63800 $35740 $28060
Ohio 1640 $63210 $33350 $29860
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Industrial Designers by Metropolitan Statistical AreaThe OES program also provides occupational employment estimates by metropolitan statistical area In number and concentration of industrial designers metropolitan areas tend to reflect state rankings For example Warren-Troy-Farmington Hills Michigan employs the greatest number of industrial designersmdash1430 in 2012 With 880 employed designers in 2012 Detroit-Livonia-Dearborn Michigan ranks fourth22
Moreover five of the top ten metropolitan areas ranked by concentration of industrial designers are in Michigan In addition to the Warren and Detroit areas this list includes Niles-Benton Harbor Holland-Grand Haven and Kalamazoo-Portage
Metropolitan areas in Wisconsin and Indiana are also on this list including Wausau and Oshkosh-Neenah in Wisconsin and Kokomo Indiana which ranks first in concentration of industrial designers by metropolitan area Like the Michigan metro areas on the list Kokomo is a locus for automotive manufacturing
Metropolitan Areas with the Highest Concentration of Industrial Designers 2012
Metropolitan area Number employed Location quotient
Kokomo IN 80 919
Niles-Benton Harbor MI 110 836
Holland-Grand Haven MI 150 639
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 598
Detroit-Livonia-Dearborn MI Metropolitan Division 880 566
Wausau WI 80 559
Anderson SC 60 436
Oshkosh-Neenah WI 80 417
Kalamazoo-Portage MI 90 329
Greenville-Mauldin-Easley SC 210 320
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
22 Warren-Troy-Farmington Hills and Detroit-Livonia-Dearborn are the two divisions composing the Detroit-Warren-Dearborn core-based statistical area (CBSA)
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
22 | Part 1 Industrial Design as an Occupation
Earnings by Metropolitan AreaNot only does Warren-Troy-Farmington rank highly in number and concentration of industrial designers but designers working there are also among the best-paid In 2012 industrial designers working in the Greater Warren-Troy-Farmington area earned annual median wages of $74730mdashabout $15000 above average
Automotive manufacturing is again shaping the list of areas with well-paid industrial designers Warren Michigan for example is home to the GM Technical Center which employs many of GMrsquos designers and engineers Michigan however is not the only automotive design area in the United States Southern California is home to automotive design centers for most of the major carmakers
BMW Design Works and the Volvo Monitoring and Concept Center for example are located in Ventura County which is part of Californiarsquos Oxnard-Thousand Oaks-Ventura metropolitan area Industrial designers working in this area are the best paid in the country earning a median annual salary in 2012 of $100610mdash$41000 more than the national average salary for industrial designers Further industrial designers working in Oxnard-Thousand Oaks-Ventura earn nearly $64000 more than the average earned by all workers in the area
Also well paid are industrial designers working in Santa Ana-Anaheim-Irvine which counts Ford Advanced Product Creation Toyotarsquos Calty Design Research and the Hyundai American Technical Center among its automotive design centers In 2012 industrial designers working in the Greater Santa Ana-Anaheim-Irvine area earned a median annual salary of $69450
Additionally Silicon Valleyrsquos industrial designers earn above-average salaries In 2012 annual median earnings were $81400 in the San Jose-Sunnyvale-Santa Clara metro and $73790 in Greater San Francisco Although high by national standards industrial designer compensation in these areas reflect overall high wages paid in Silicon Valley In 2012 for example workers in San Jose-Sunnyvale-Santa Clara earned $18000 more than the average US worker
Top-Paying Metropolitan Areas for Industrial Designers 2012
Number employed Median annual earnings Median annual earnings of all workers
Premium earned by industrial designers
US 29303 $59610 $34750 $24860
Oxnard-Thousand Oaks-Ventura CA 110 $100610 $36930 $63680
San Jose-Sunnyvale-Santa Clara CA 200 $81400 $53470 $27930
Warren-Troy-Farmington Hills MI Metropolitan Division
1430 $74730 $36150 $38580
San Francisco-San Mateo-Redwood City CA Metropolitan Division
350 $73790 $50690 $23100
Cincinnati-Middletown OH-KY-IN 570 $73020 $34770 $38250
Portland-Vancouver-Hillsboro OR-WA 200 $71080 $38430 $32650
Dayton OH 100 $70490 $33940 $36550
Santa Ana-Anaheim-Irvine CA Metropolitan Division 350 $69450 $38490 $30960
Greenville-Mauldin-Easley SC 210 $69440 $30770 $38670
Grand Rapids-Wyoming MI 230 $69350 $33450 $35900
Excludes metropolitan areas with fewer than 100 employed industrial designers
Source Occupational Employment Statistics Bureau of Labor Statistics US Department of Labor
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 23
Car Design in Southern CaliforniamdashrdquoDetroit WestrdquoDetroit may be the first area that comes to mind as the epicenter of auto design in the US After all GM Toyota and Ford all design cars in the Greater Detroit Metropolitan Area However all three companies also have design operations in Southern California as do many of the worldrsquos leading car manufacturers so much so that the Southern California counties of Ventura Los Angeles Orange and San Diego are collectively called ldquoDetroit Westrdquo
In addition to design centers for GM Toyota and Ford Southern California is also home to the Volkswagen Design Center (Santa Monica) BMW Design Works (Newbury Park) and Mercedes Advanced Design (Carlsbad) to name just a few
Southern Californiarsquos car culture and pleasant temperatures are no doubt a draw to auto designers But so too is the local design talent cultivated by Pasadenarsquos Art Center College of Design Art Centerrsquos alumni include a Whorsquos Who of car design including Pete Brock and Larry Shindoa who designed the 1957 Corvette Stingray concept car Christopher Bangle BMWrsquos first American chief of design and Harald Belker who may be best known for designing vehicles for Hollywood films (eg Steven Spielbergrsquos Minority Report) but who also helped design the Mercedes Smart Car
Car Design Centers in Southern California
Mercedes
Volkswagen
GM
VENTURA LOS ANGELES
ORANGE
SAN DIEGO
VolvoBMW
Honda
ToyotaFord
Kia
Nissan
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Part 2 Industrial Design as a Business
Continuum employees illustrate the design process and cross-disciplinary nature of industrial design work Photo courtesy of Continuum LLC
As discussed in the preceding section hiring of industrial designers is projected to increase in the professional services sector which contains a variety of industries including specialized design services and more specifically industrial design services
The US Census Bureau defines industrial or commercial design services represented by NAICS 541420 as establishments engaged primarily in creating and developing designs and specifications that optimize the use value and appearance of their products23 The Census Bureau reports that industrial design services can include the determination of the materials construction mechanisms shape color and surface finishes of the product taking into consideration human characteristics and needs safety market appeal and efficiency in production distribution use and maintenance
23 NAICS is the North American Industrial Classification System
24 | Part 2 Industrial Design as a Business
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 25
This section draws on two US Census Bureau business data sources to examine the industrial design industry The first is 2011 County Business Patterns (CBP) data which are based on annual business surveys including the Service Annual Survey (which surveys 72000 service businesses with paid employees) and on administrative data extracted from Bureaursquos Business Register CBP data are used to enumerate establishments that offer industrial design services workers employed in these firms and the industryrsquos payroll24
The second data source for this section of the report is the 2007 Economic Census Although less current than CBP data the Economic Census provides greater detail about industrial design firmsrsquo services and revenues25
This part of the report relies almost exclusively on Economic Census terminology for sectors and their component industries Because some industry names are likely to be unfamiliar to most people a brief explanation of the classification system as it relates to industrial design is given in an appendix to this report (see page 48)
Specialized Design Services Industrial design establishments make up a small share of the specialized design services industries However its payroll is comparable to that of interior design services an industry employing twice the number of workers
CBP data show 1579 business establishments specializing in industrial design in 2011 By contrast there were 11135 firms specializing in interior design and 15000 in graphic design26
The same year industrial design firms employed 16308 workers Although this count was half the number of workers employed by interior design firms the commercial design services industryrsquos payroll was $14 billion close to the $15 billion paid in wages and salaries by interior design firms
Specialized Design Services 2011
Specialized design services Number of establishments
Number of paid employees2
Annual payroll ($1000)
Industrial design services 1579 16308 $1379490
Graphic design services 15226 50241 $2653155
Interior design services 11135 32478 $1547402
Other specialized design services1 2010 8248 $448931
1 Examples include fashion floats jewelry lighting and textile design services2 As of March 12 20112
Source County Business Patterns US Census Bureau US Department of Commerce
24 A business establishment is a single physical location at which business is conducted or services are provided It is not necessarily identical to a company or enterprise which may consist of one establishment or more
25 The US Census Bureau conducts the Economic Census every five years It is conducted for years ending with ldquo2rdquo and ldquo7rdquo
26 Unless otherwise noted ldquoestablishmentrdquo and ldquofirmrdquo are used interchangeably in this report
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
26 | Part 2 Industrial Design as a Business
CBP data also show that the number of industrial design firms and the number of workers employed by them have fluctuated in response to business cycles particularly during the severe 2007ndash2009 recession For example in 2008 the first full year of the recession employment in industrial design firms actually grew by more than 28 percent to reach 17300 workers But in 2009 the effects of the recession took hold and employment in that industry dropped by 22 percentmdashthe single largest percentage point decline in the 1998ndash2011 period27
In 2010 the number of workers employed by industrial design firms stabilized at 13770 then grew sharply in 2011 to reach 16300 workers a number suggesting the beginning of a recovery in industrial design employment28
27 Current CBP data extraction tools provide data for the 1998ndash2011 period Archived data for 1994ndash1997 are also available on the Bureaursquos CBP website at httpwwwcensusgoveconcbp historicalhtm
28 CBP estimates for 2012 are scheduled for release in April 2014
Number of Workers Employed in Industrial Design Firms 1998 ndash2011 20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
020041999 2000 2001 2002 20031998 2005 2006 2007 2008 2009 2010 2011
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 27
Revenue Sources Not surprisingly most of the revenue earned by industrial design establishments stems from sales of product design and related services The 2007 Economic Census the most recent business census for which statistics are available showed that product design and model design and fabrication (as well as ldquoother industrial designrdquo) accounted for nearly 94 percent of the revenue earned by industrial design firms29 In 2007 product design and related services generated $14 billion in sales
In addition to their primary work of designing products some industrial design businesses offer other services such as drafting and graphic and clothing design In 2007 for example 148 industrial design firms provided graphic design services Although that number was smallmdashfewer than 10 percent of all the establishments in that industrymdashgraphic design services generated $371 million in sales and half of that figure ($188 million) came from sales of graphic designs of corporate or organizational images
Products and Services Provided by Industrial Design Firms 2007
Establishments Revenue ($1000)
Percent of industry revenue
Industry total 1637 $1541787 1000
Industrial design services 1605 $1441980 935
Product design 1243 $941596 611
Model design and fabrication 656 $274511 178
Other industrial design 457 $217278 141
Drafting services 25 $3152 02
Graphic design services 148 $37142 24
Corporateorganization image graphic design services
79 $18766 12
Advertising graphic design creative services 57 $9079 06
Publication graphic design services 19 $375
Commercial illustration graphic design services 29 $820 01
Website design and development services 53 $1270 01
All other graphic design services 17 $6831 04
Clothing design services 22 $6515 04
Other specialized design services 11 $10112 07
Resale of merchandise 60 $22647 15
All other operating revenue 46 $19968 13
Not reported
Source 2007 Economic Census US Census Bureau US Department of Commerce
29 Of the 1637 industrial design services establishments enumerated by the 2007 Economic Census 1605 reported revenue by product or service Consequently percent of revenue by various products (eg product design graphic design etc) does not add to 100 percent
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
28 | Part 2 Industrial Design as a Business
Industrial Design ExportsThe Economic Census also tracks sales from exported services In 2007 218 industrial design firms exported $1127 million in services amounting to one-quarter of all revenue earned by firms exporting industrial design services
Industrial Design Services Establishments Exported Services 2007
Number of establishments Total revenue of these Revenue from exported services exporting services establishments ($1000) ($1000)
218 $467900 $112745
Source 2007 Economic Census US Census Bureau US Department of Commerce
Revenue Earned by the Largest Industrial Design FirmsWhile most business data produced by the US Census Bureau are reported for ldquoestablishmentsrdquo the Economic Census also shows the percent of revenue earned by the largest ldquofirmsrdquo which refers to a business organization consisting of one domestic establishment or more under common ownership
That small distinction aside the Economic Census shows that much of the revenue earned in this industry is concentrated among the top companies more so than for other firms in the professional services sector to which industrial design firms belong30
In 2007 for example the four largest industrial design firms (ie largest in revenue) earned 114 percent of all the revenue earned in that industry Although the US Census Bureau is barred from reporting data on individual establishments industry analysts suggest that the top four are Continuum (West Newton Massachusetts) IDEO (Palo Alto California) Frog Designs (San Francisco California) and Lunar Design (Palo Alto California)
By contrast the four largest firms in all professional scientific and technical services (the sector that encompasses industrial design firms) earned 42 percent of the sectorrsquos revenue
Comparing industrial design firms to other specialized design companies underscores this concentration In 2007 the top 50 industrial design services firms earned 45 percent of the industryrsquos revenue while the top 50 interior and graphic design companies earned 12ndash13 percent
The top 50 ldquoother specialized designrdquo firms earned 39 percent of the industryrsquos revenuemdashabove average but below the share reported for the top industrial design firms
30 As explained in Part 1 ldquoprofessional servicesrdquo includes architectural and engineering services specialized design services (including industrial design services) scientific research services and advertising services among others
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 29
Percent of Revenue Earned by Largest Firms 2007
Number of establishments
Revenue ($1000)
Percent of revenue earned by largest firms
Industrial design services
All firms 1637 $1541787 1000
4 largest firms 11 $176136 114
8 largest firms 16 $290131 188
20 largest firms 31 $488561 317
50 largest firms 73 $693153 450
Professional scientific and technical services
All firms 847492 $1251003504 1000
4 largest firms 3067 $52890516 42
8 largest firms 7086 $86265201 69
20 largest firms 8779 $155028542 124
50 largest firms 19898 $229218067 183
Source 2007 Economic Census US Census Bureau US Department of Commerce
Percent of Revenue Earned by the 50 Largest Specialized Design Firms per Industry 2007
50
45
40
35
30
25
20
15
10
5
0Industrial design Other specialized design Interior design Graphic design
Source 2007 Economic Census US Census Bureau US Department of Commerce
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
30 | Part 2 Industrial Design as a Business
State Location of Industrial Design BusinessesReturning to CBP data state tabulations show that the greatest numbers of industrial design services establishments are in the large-population states of California New York Florida Illinois and Michigan In 2011 those five states were home to half of all US industrial design firms
These states also rank highly in numbers of industrial design establishments per capita In California New York and Michigan for example there were roughly four establishments per 500000 populationmdasha figure well above the US average of 25 However in number of industrial design establishments per capita no state ranks as high as Rhode Island In 2011 18 establishments were located in Rhode Island Given the statersquos 2011 population of 11 million Rhode Island consequently was home to 86 industrial design firms per 500000 population
Industrial Design Services Establishments 2011 Selected Top States
Number of establishments
Per capita1
US 1579 25
California 299 40
New York 168 43
Florida 127 33
Illinois 95 37
Michigan 85 43
Ohio 74 32
North Carolina 72 37
Massachusetts 49 37
Oregon 34 44
Connecticut 26 36
Rhode Island 18 86
1 Per 500000 population
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 31
Design in Rhode IslandPer capita Rhode Island is home to more industrial design establishments than any other state In 2011 there were roughly eight industrial design firms per 500000 populationmdasha count significantly higher than the national average of 25 and higher than the four establishments per 500000 population in California New York or Michigan
Rhode Islandrsquos primacy in industrial design services stems in part from the Rhode Island School of Design (RISD) in Providence There are 18 industrial design firms in Rhode Island ten in Providence alone Examples of local firms are Observatory Tellart Ximedica Item New Product Development and Fuzion Design Notably toy manufacturer Hasbro is headquartered in nearby Pawtucket Rhode Island
RISD was founded by Helen Rodelia Rowe Metcalf in 1877mdashmore than 40 years before women gained the right to vote Its alumni include Stuart Karten founder of the Los Angeles-based industrial design firm Karten Design and David Hanson well known for his creation of realistic humanoid robots
Industrial Design Services in Rhode Island Business Establishments in 2011
East Greenwich
Newport
Smithfield
Providence
Charlestown
Coventry
Warren
Source County Business Patterns US Census Bureau US Department of Commerce
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
32 | Part 2 Industrial Design as a Business
State PayrollWhile CBP data do not report revenue they do show payroll which is used here to gauge the finances of industrial design establishments by state In 2011 the payrolls of Californiarsquos industrial design firms exceeded $239 million and in New York the industryrsquos payroll was $94 million Other states ranking high in industrial design firmsrsquo payroll included Ohio ($867 million) Illinois ($741 million) and Texas which while home to only 59 such establishments in 2011 generated $42 million in industrial design payroll
Californiarsquos large industrial design payroll reflects the sheer size of the industry in that state For example Californiarsquos payroll for the industry is more than two times greater than for New Yorkrsquos industrial design sector Also California is home to twice the number of industrial design firms and workers as New York
Industrial Design Services Payroll Top Five States in 2011
$300
$250
$200
$150
$100
$50
$0
(mill
ion
s)
California New York Ohio Illinois Texas
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 33
Industrial Design Businesses by Metropolitan Statistical AreaCBP data also show counts of business establishments in the industrial design services industry for metropolitan statistical areas though estimates of payroll and number of employees are typically reported for large metro areas only
In 2011 the New York and Los Angeles metropolitan areas scored the greatest numbers of establishments 170 and 147 respectively In fact 20 percent of all US industrial design establishments are located in either the New York and Los Angeles areas
These two areas also rank highly in number of firms per capita In New York there were 43 industrial design establishments per 500000 population and in Los Angeles even moremdash57 per 500000 population
Per capita the San Francisco California area had 69 industrial design firms in 2011 while Portland (Oregon) San Jose (California) and Providence (Rhode Island) each had 62 per 500000 population However no metro area approaches Greensboro-High Point (North Carolina) in number of establishments per capita In 2011 the estimated population for Greensboro-High Point was just over 700000 giving the area 212 industrial design firms per 500000 population
Propelling Greensboro-High Pointrsquos per-capita count of commercial design firms is the arearsquos furniture industrymdashindeed High Point has been called the ldquoFurniture Capital of the Worldrdquo As will be discussed in Part 3 of this report furnishings account for a large share of design patents awarded by the US Patent and Trademark Office (USPTO) US design patents awarded in North Carolina are dominated by the furnishings product class and by well-known furniture manufacturers such as Thomasville Bernhardt and Broyhill which are the top three ldquoassigneesrdquo of North Carolinarsquos design patents31
31 The USPTO identifies the origin of a patent by the residence of the first-named ldquoinventorrdquo or in this case a designer Patents are typically assigned to the manufacturer employing the designer either on staff or whose services were acquired through a design services company
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
34 | Part 2 Industrial Design as a Business
Industrial Design Services Business Establishments in 2011
Miami
New YorkProvidence
Atlanta
Detroit
Minneapolis
Chicago
Wichita
Denver
Salt Lake City
San Franciso
Portland
Seattle
Phoenix
HoustonAustin
Los Angeles
147ndash170 establishments
US total = 1579
1 establishment
Source County Business Patterns US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 35
Industrial Design Services Establishments 2011 Top Metropolitan Areas
Number of establishments
Per capita1 Payroll ($1000) Number of employees
US 1579 25
New York-Northern New Jersey-Long Island NY-NJ-PA
170 43 $87053 1183
Los Angeles-Long Beach-Santa Ana CA 147 57 $92454 1030
Chicago-Naperville-Joliet IL-IN-WI 86 45 $70253 700
San Francisco-Oakland-Fremont CA 61 69 $64624 580
Miami-Fort Lauderdale-Pompano Beach FL 56 49 $5838 124
Detroit-Warren-Livonia MI 39 45 D a
Boston-Cambridge-Quincy MA-NH 37 40 $21126 260
Greensboro-High Point NC2 31 212 $6245 114
San Diego-Carlsbad-San Marcos CA 29 46 $10444 157
Portland-Vancouver-Beaverton OR-WA 28 62 $12517 207
Minneapolis-St Paul-Bloomington MN-WI 27 40 $9588 127
Cleveland-Elyria-Mentor OH 26 63 $16227 287
Seattle-Tacoma-Bellevue WA 26 37 $30690 360
San Jose-Sunnyvale-Santa Clara CA 23 62 D b
Providence-New Bedford-Fall River RI-MA 20 62 $10222 129
1 Per 500000 population2 Population in 2011 was 730531
D Withheld to avoid disclosing data for individual companies
a 2500ndash4999 employees
b 250ndash499 employees
Note 20 industrial design services establishments were also reported for the Philadelphia Houston Atlanta and Phoenix metropolitan areas However each of these metros was at or below the national per capita average of 25
Source County Business Patterns US Census Bureau US Department of Commerce
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Part 3 Industrial Design as a Product Innovator
1948 design patent for a chair by Charles Eames Assignee Evans Products Company Detroit Michigan
So far this report has profiled the industrial design field in terms of workers and establishments their locations and earnings and their actual and projected growth rates But what does industrial design contribute to product innovation To answer the question we turn to an additional metric the annual growth rate of US-awarded design patents Patents are not necessarily a perfect measure of product innovation but they are an accessible and concrete measure
Through this lens we witness the 19th-century birth of US industrial design and ensuing periods of heightened design activity such as the 1930s era of streamlining As of 2012 moreover there were roughly seven US-awarded design patents per 100000 populationmdashan all-time high for industrial design in this country
36 | Part 3 Industrial Design as a Product Innovator
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 37
Patent data also illustrate the breadth of products designed by industrial designers Patents protect the designs of products ranging from ice cream cones and dog beds to power tools and high chairs Design patents were at the center of the recent billion-dollar legal dispute between rival smartphone manufacturers Apple and Samsung
Patent data show that industrial design is big business In addition to Apple and Samsung companies such as Microsoft and Nike lead in US awards of design patents The headquarters of US manufacturing firms in turn contribute to a geographic pattern in which design-patent awards are concentrated in western and midwestern states
Finally patent data reveal that industrial designers are inventive ldquoDesigners-inventorsrdquo (individuals who are named on both design and utility patents) are named on substantially more utility patents than inventors named only on utility patents
A Brief History of Design PatentsAlthough the US government awarded its first patent in 1790 (signed by President George Washington and Secretary of State Thomas Jefferson) patents initially protected only the invention of a new article or the improvement of a processing system Patents to protect the design of a ldquousefulrdquo product were not available until the 1840s when new manufacturing technologies introduced design elements as a means of creating distinctive consumer products In particular the manufacture of two products iron stoves and patterned textiles illustrate the development of US industrial design and the motive for protecting designs through patents
In the 1830s New Yorkrsquos Jordan Mott revolutionized the process for manufacturing cast-iron stoves by incorporating fluting and curves into his stove designs First added to enhance heat dissipation these design elements distinguished Mottrsquos stoves and created consumer appeal for the stoves and other metal products he manufactured During this same period New Englandrsquos textile manufacturer Francis Lowell designed an ornate calico print that became so popular it largely replaced checks and home-spun plaids
Because design patents were unavailable in the 1830s both Mott and Lowell were subject to piracy from their competitors until 1842 That year with help from Mottrsquos lobbying efforts the US passed a statute providing for the grant of patents for ldquoany new and original design for a manufacture or for printing on fabricrdquo
Today the US Patent and Trademark Office defines ldquodesignrdquo as the visual characteristics embodied in or applied to an article The design patent relates to the configuration or shape of an article to the surface ornamentation applied to an article or to the combination of the configuration and surface ornamentation To distinguish between design and utility the USPTO guide notes that a ldquoutilityrdquo patent protects the way an article is used and works while a ldquodesignrdquo patent protects the way an article looks
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
38 | Part 3 Industrial Design as a Product Innovator
Forms of Intellectual Property ProtectionUtility patents protect a new and useful process machine article of manufacture composition of matter or any new and useful improvement thereof The statutory period is 20 years after the application date
Design patents protect new original and ornamental design for an article of manufacture The statutory period is 14 years from date of issuance
Plant patents protect the invention or discovery of asexually reproduced new plant variety The statutory period is 20 years after the application date
Copyright protects the authors of literary dramatic musical artistic and other intellectual works both published and unpublished The copyright protects the form of expression rather than the subject matter of the work Per the Copyright Act of 1976 copyrighted works created as of January 1978 are protected for the life of the author plus an additional 70 years
Trademark laws protect a word name symbol device or design and packaging (as in trade dressing) that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Trademark rights prevent others from using a confusingly similar mark or designpackaging Trademark rights apply until abandonment
Trade secret laws protect technological and industrial information not generally known in the trade against unauthorized industrial use by others Legal protection is afforded only to owners who have taken diligent steps to preserve trade secrets
Types of Designs Protected by PatentsExamining design patents by class reveals the diversity of industrial design US patent designs are awarded in product-design classes ranging from food items (eg the design of chocolate bars) and animal husbandry products (such as horse saddles and bird houses) to the design elements of dishwashers swimming pools and musical instruments
Of the 32 distinct design patent classes however more than half of all design patents granted in the US are awarded in just eight classes with the top two classes accounting for 20 percent32 Between 1998 and 2012 the USPTO awarded 29540 design grants in furnishingsmdasha class covering the design of furniture cabinets and carpetsmdashand in recording communication and information equipment which includes the design of smartphones computer icons and computer keyboards
The remaining top classes include design patents in tools and hardware packages and containers transportation and toys
US-Awarded Design Patents Top Eight Classes 1998 ndash2012
Class Class Title 1998 ndash2012 2012 Share of all design patents 1998 ndash2012
ALL All design patents 165108 12445 1000
Design patents granted in top eight classes
89542 6457 542
D06 Furnishings (Cabinet rocking chair playpen carpet design)
16393 1103 99
D14 Recording communication or information retrieval equipment (Mobile telephone mouse pad computer icon barcode scanner)
13147 1194 80
D08 Tools and hardware (Chain saw furniture castor shelf brackets scissors)
11142 696 67
D09 Packages and containers for goods (Perfume bottle egg carton drinking bottle)
10164 867 62
D07 Equipment for preparing or serving food or drink1 (Espresso maker banana holder napkin holder pizza oven)
10019 858 61
D12 Transportation (Car chassis golf cart wheelchair ATV)
9991 579 61
D23 Environmental heating and cooling fluid handling (Outdoor fountain sink faucet sauna ceiling fan)
9449 576 57
D21 Games toys and sports goods (Hockey stick treadmill baby rattle jukebox)
9237 584 56
1 Not elsewhere classified
Data source US Patent and Trademark Office US Department of Commerce
32 These figures apply to design patents of US origin However combining US and foreign origin design patents product classes D14 and D06 account for 11 percent and 8 percent respectively of the total number of USPTO-awarded design patents in 1998ndash2012
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 39
Design Patents by OwnershipCompanies both US and foreign receive roughly 75 percent of the design patents granted by the USPTO In 2012 that split was 45 percent to US companies and 32 percent to foreign businesses33
US-Awarded Design Patents by Ownership 2012
Foreign Individuals45
Foreign Companies319
US Companies446
US Individuals190
Data source US Patent and Trademark Office US Department of Commerce
Examining design patents granted to companies by country reveals that designed manufactured goods (manufactured goods protected by US design patents) sold in this country are dominated by a diverse US manufacturing industry and by foreign manufacturers concentrated among Asian electronics and auto industries
In number of US design patents granted the top ten US companies represent a wide range of manufacturing First on this list is Microsoft followed by Procter amp Gamble and Nike Each of these companies which collectively represent such diverse sectors as software consumer products and sporting apparel were granted more than 1500 design patents between 1999ndash2012
The top US list also includes manufacturers of tires and rubber (Goodyear) plumbing fixtures (Kohler) office supplies (3M) and auto manufacturing (Ford) Also on the list Apple maker of the iPhone and iPad received 788 US design patents from 1999 to 2012
33 Patent origin is determined by the residence of the first-named ldquoinventorrdquo or in the case of design patents the first-named designer The reported figures show the percent of awarded patents as distributed by year of patent application For more information please see USPTO Table A2-2b cited in the references to this report
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
40 | Part 3 Industrial Design as a Product Innovator
US-Awarded Design Patents 1999 ndash2012 US Headquarter CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All US headquartered companies 101376 na na
Microsoft Corporation 1900 Redmond WA Computer softwarevideo games
Procter amp Gamble Company 1842 Cincinnati OH Personal care
Nike Inc 1690 Washington County OR Footwear and apparel
Goodyear Tire and Rubber Company 1260 Akron OH Tires and rubber
Black amp Decker Inc 1023 Towson MD Power toolshardware
Wolverine World Wide 939 Rockford MI Footwear
Kohler Company 853 Kohler WI Plumbing cabinetry engines
Apple Inc 788 Cupertino CA Computer hardwaresoftware
3M Innovative Properties Company 754 St Paul MN Diversified (eg Post-It Thinsulate)
Ford Motor Company1 745 Dearborn MI Automotive
1 Includes design patents awarded to Ford Global Technologies
Data source US Patent and Trademark Office US Department of Commerce
Among foreign companies granted US design patents Asian countries particularly companies headquartered in Japan and Taiwan compose the largest share Moreover the Asian companies granted US design patents are concentrated in electronics and auto manufacturing Between 1999 and 2012 Sony was granted more than 3000 US design patents Honda received more than 1200 US design patents
Although companies in the United States are granted more US design patents than foreign-owned companies the top ten foreign companies in number of design patents receive more patents than US companies ranking highly in awards of design patents Between 1999 and 2012 the top ten foreign companies in grants of US design patents received 15561 patents Over this same period the top ten US companies received 11794 design patents This concentrationmdasha large number of US design patents granted to fewer foreign companiesmdashstems largely from Samsung and Sony Between 1999 and 2012 each company received more than 3000 US design patents
US-Awarded Design Patents 1999 ndash2012 Foreign-Headquartered CompaniesmdashTop 10 in Design Patents
Grantee Design patents granted 1999 ndash2012
Headquarters Industry
All foreign-headquartered companies 87433 na na
Samsung Electronics Co 3323 South Korea Electronics and information technology
Sony Corporation 3308 Japan Electronics and entertainment
Foxconn (Hon Hai Precision Industry Co) 1613 Taiwan Electronics
LG Electronics 1496 South Korea Diversified (eg electronics entertainment)
Panasonic1 1488 Japan Electronics
Honda Motor Company 1239 Japan Automotive
Nokia Corporation 1051 Finland Communications and information technology
Toyota Motor Corporation 973 Japan Automotive
Toshiba Corporation 588 Japan Engineering and electronics
Canon Inc 482 Japan Imaging and optical products
1 Includes design patents granted to the Matsushita Industrial Company in 1999 through 2008
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 41
The Patent Trial of the Century Apple vs SamsungIn August 2012 a US district court awarded Apple more than $1 billion in damages in a patent dispute with rival smartphone and tablet manufacturer Samsung Although the award to Apple was reduced to $599 million in March 2013 it remains among the highest patent-infringement awards The Wall Street Journal termed the dispute ldquoThe Patent Trial of the Centuryrdquo
The case was particularly relevant to industrial design because Apple and Samsungrsquos arguments hinged on design rightsmdashfour of the six patents contested were design patents
Underscoring the importance Apple has placed on design InformationWeek reported in September 2006 that 118 percent of Applersquos patent portfolio is made up of design patentsmdasha share well above the electronics industryrsquos average of 27 percent
State Clustering of Design PatentsA geographic analysis of design patents reinforces the general impression that much of US industrial design is clustered in western and midwestern states
For example California ranks first and foremost in grants of US design patents Between 2008 and 2012 12520 design patents were awarded in California This tally represents 20 percent of all state-level design patents Ranking a distant second was New York which garnered roughly 4600 design patents or 73 percent of the state total
Adjusting for state population however changes that ranking Per capita Washington state ranks first in number of US design patents granted between 2008 through 2012 Over this period Washington garnered 403 design patents per capita Washington State is also home to Microsoft Corporation which is among the top-ranking companies in design patent awards
Following closely in state rank are Wisconsin and Oregon each granted 39 design patents per capita between 2008 and 2012 Wisconsin and Oregon are home to SC Johnson amp Son and Nike respectively Over this five-year period 345 design patents per 100000 population were awarded in Rhode Island home to the Hasbro toy company
In addition to Wisconsin other Great Lake states ranking highly in numbers of design patents include Minnesota and Ohio Between 2008 and 2012 327 design patents per capita were awarded in Minnesota Minnesota is headquarters to the 3M Innovative Properties Company (maker of Post-It and Thinsulate) Over this period nearly the same number of design patents per 100000 people were awarded in Ohio home to both Procter amp Gamble and the Goodyear Tire and Rubber Company
Although the western and midwestern states dominate in awards of US design patents Massachusetts and New York also rank highly with roughly 25 design patents per capita Contributing to this ranking are New Yorkrsquos Colgate-Palmolive Company and the Gillette Company in Massachusetts
US-Awarded Design Patents Selected Top States 2008 ndash2012
State Per capita design patents granted1
Illustrative Corporate Headquarters
Washington 403 Microsoft Corporation
Wisconsin 390 SC Johnson amp Son Inc
Oregon 388 Nike Inc
Rhode Island 345 Hasbro Inc
California 335 Apple Inc
Minnesota Ohio 327 325 3M Innovative Properties Company Procter amp Gamble Company
Illinois 290 Motorola Inc
Massachusetts 255 Gillette Company
New York 237 Colgate-Palmolive Company
Michigan 228 Ford Motor Company
1 Per 100000 people calculated from US Census Bureau population estimates for 2008ndash2012
Data source US Patent and Trademark Office US Department of Commerce
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
42 | Part 3 Industrial Design as a Product Innovator
US Design Patents Granted 2008 ndash2012 Per Capita (100000 People)
38 to 40
32 to 35
20 to 30
10 to 19
9 or fewer
Data source US Patent and Trademark Office US Department of Commerce
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 43
Business Cycles and Trends in Design PatentsThe number of US design patents ebbs and flows with US business cycles In 1999 the USPTO awarded 14732 design patents (both US and of foreign origin) Although there was strong growth in the number of design patents granted in 2000 the relatively mild US recession of 2001 likely contributed to the decline in US design patents granted in 2001 and 2002 As the US economy recovered there was an increase in the number of design patents awarded For example USPTO-awarded design patents grew by nearly 15 percent in both 2006 and 2007
In December of 2007 however the US economy fell into a severe recession that lasted until June 2009 Growth in design-patent awards slowed to 6 percent in 2008 followed by a sharp drop in design patents of nearly 10 percent in 2009 The number of design patents granted continued to fall albeit less sharply in 2010 and 2011 Recent counts for 2012 show a modest recovery of 28 percent growth in US-awarded design patents
US-Awarded Design Patents Grants and Applications 1992ndash2012
The USPTO awarded 12951 design patents in 2005 That count however reflects administrative changes including an aberration resulting from the USPTOrsquos transition from paper to electronic publishing of patents Consequently the number of design patents awarded in 2005 shown in the graph above was calculated by averaging the number awarded in 2004 and 2006 resulting in an estimate of 18330 design patents awarded in 2005
Data source US Patent and Trademark Office US Department of Commerce
Although marked business cycles are short-run phenomena that can mask long-term trends in design patents Examination of US-awarded design patents since 1910 reveals two distinctive growth periods 1910 through the mid-1940s and in particular the late 1980s through the present
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
44 | Part 3 Industrial Design as a Product Innovator
To illustrate the graph below shows a ten-year moving average of US-awarded design patents per capita As indicated design patents witnessed growth between 1910 and the mid-1940smdashover this timeframe US-awarded design patents grew from approximately one design patent per 100000 population to four
Remarkable for this period is that unlike utility patents which plummeted during the 1930s the number of US-awarded design patents generally grew throughout the Great Depression Propelling that growth was a milestone in industrial designmdashrdquostreamliningrdquo introduced by the Burlington Zephyr at the 1933ndash34 Chicago Century of Progress Exhibition (see sidebar on page 45)
However the mid-1940s through most of the 1960s witnessed a reversal in this trend In 1958 for example US-awarded design patents per capita fell to 14 The decline during that period reflects in part a 1952 revision to patent law that provided short-term protection for ornamental designs of useful articles under a modified copyright approach
In 1976 however the US Congress rejected that revision and returned the protection of industrial design to the conventional patent system34
History of US Patented Designs per Capita 1910 ndash2012 by Year Granted90
80
70
60
50
40
30
20
10
00
Design patents per 100000 population 10-year moving average of design patents per 100000 population
1910 1916 1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012
Data source US Patent and Trademark Office US Department of Commerce
34 Reichman JH ldquoDesign Protection and the New Technologies A United States Experience in a Transitional Experiencerdquo Baltimore Law Review 1989 vol 19
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 45
Streamlining 1933ndash1934 Chicago Century of Progress ExpositionManufacturing companies managing to survive the Great Depression of the 1930s faced stiff competition In order to distinguish their products companies hired industrial designers who increasingly followed a new design stylemdashstreamlining
Streamlining made popular by the Burlington Zephyr was introduced at the Century of Progress Exposition at the Chicago Worldrsquos Fair in 1933 and 1934 It was based on the naturally efficient shapes of fish and birds and incorporated curved and tapered shapes that offered less resistance to air and fluid
Captivating the American public streamlined design was evident in objects as varied as cameras cars radios refrigerators and even the iconic Coca-Cola bottle Among its chief proponents were Raymond Loewy who designed the aforementioned Coca-Cola bottle as well as the Saturn Spaceship and the Greyhound bus and logo among other products Interestingly Loewyrsquos design studio employed Audrey Moore Hodges who was the first full-time female auto designer and who designed the 1947 Studebaker Champion
Other streamlining designers included Norman Bel Geddes known for his theatrical and movie sets Walter Dorwin Teague associated with exhibition design as well as designs for Ford Kodak and Boeing and Henry Dreyfuss who famously designed table-top telephones for Bell Laboratories Hoover vacuum cleaners and the New York City Hudson locomotive
In the 1980s consequently the per-capita concentration of US-awarded design patents rose heralding a post-industrial era of sustained growth in design and utility patents In 2008 USPTO-granted design patents per capita reached a high of 84 For that matter the 1980s post-industrial period also witnessed strong growth in utility patents which per 100000 population climbed from 27 in 1980 to nearly 52 in 2008
Industrial Designers as InventorsIn May 2012 the Brookings Institution convened ldquoThe Arts New Growth Theory and Economic Developmentrdquo a National Endowment for the Arts-sponsored symposium to examine ldquonew growth theoryrdquo as a tool for assessing the impact of art and culture on the US economy Presenting at this conference Alan Marco currently the USPTOrsquos acting chief economist portrayed designers as prolific inventors
Examining patent filing data between 1975 and 2010 Marco found that among 136000 ldquodesignersrdquo (those named as inventors on design patents) 55000 or 40 percent were ldquodesignersrdquo and ldquoinventorsrdquo (named as inventors on utility patents as well)35 Among the 25 million ldquoinventorsrdquo during this period only 2 percent were ldquoinventorsrdquo and ldquodesignersrdquo ie named inventors on both utility and design patents
Even more telling was the high number of utility patents originating with ldquodesigners-inventorsrdquo Over the period studied the mean number of utility patents originating with designers-inventors was 73 By contrast the average number of utility patents naming inventors-designers was 33
Average Number of Utility Patents 1975 ndash20108
7
6
5
4
3
2
1
0Per designerinventor Per inventornon-designer
Analysis by Alan Marco US Patent and Trademark Office US Department of Commerce
35 All USPTO-granted patents list the individual inventors of the work However many patents are awarded to companies who were listed as the assignees on patent applications
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Conclusion The NEA and Industrial Design
D-Rev Chief Executive Officer and Designer Krista Donaldson demonstrates the Brilliance product an affordable medical device to treat severely jaundice newborns Photo courtesy of D-Rev Design Revolution
At first glance it may seem as though industrial design has little to do with the National Endowment for the Arts After all industrial design clusters around the commercial enterprises of manufacturing and industrial design services
But that view would be shortsighted While the Arts Endowment does not award grants to for-profit companies it does support the schools that train industrial designers and the museums that display and interpret design to the public In 2013 for example the agency awarded $50000 to Atlantarsquos Robert W Woodruff Arts Center of the High Museum to support Spark Innovative Automotive Design an exhibition that will investigate how visionary automotive designs influenced the automotive industry
46 | Conclusion The NEA and Industrial Design
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 47
Also not all industrial design occurs in large for-profit companies D-Rev for example is a California-based nonprofit product-development company whose mission is to improve the lives of the worldrsquos poorest populations In 2013 D-Rev received a $25000 NEA grant to develop an interactive online platform for product designers working on social-impact projects
However the connection between the NEA and industrial design goes beyond awarding grants In the fall of 2013 the Arts Endowment in partnership with the Bureau of Economic Analysis is scheduled to release the first-ever US satellite account on arts and cultural industries To fully measure how the arts affect the US economy the Arts and Cultural Production Satellite Account (ACPSA) will capture traditionally nonprofit arts industries such as art museums and symphony orchestras as well as commercial enterprises The ACPSA for example will include a domain labeled ldquoapplied arts and design servicesrdquo which will measure production and employment by specialized design services industries including industrial design
Further the ACPSA at the time of its release will be accompanied by an NEA taxonomy of arts and cultural occupations which will include industrial designers and other design professionals The ACPSA and its associated occupations thus will account for the total economic impact of industrial design whether in the commercial or nonprofit sector
As the final section of this report suggests however one cannot assign a true value to this industry and its workers without also considering the role of design in product invention It is to be hoped that future studies both quantitative and qualitative will clarify more extensively the link between industrial design and innovation in products and services but also in processes systems and user experiences A broader frame of inquiry and a mixed-methods research approach would go even further to improve public knowledge about this protean and prolific sector
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
48 | Appendix
Appendix Understanding Industry ClassificationsAs reported by the US Census Bureau the North American Industry Classification System (NAICS) is used by federal statistical agencies in classifying business establishments for the collection tabulation and presentation of statistical data describing the US economy The NAICS structure is hierarchical and begins at the two-digit level which represents the industry sector and expands to six digits of industry classification detail
This report for example draws on statistics for two industry sectorsmdashmanufacturing which is NAICS 31 32 and 33 and ldquoprofessional scientific and technical servicesrdquo which is NAICS 54 Each of these industry sectors comprises industry groups and detailed industries Professional scientific and technical services for example includes legal services accounting and payroll services computer systems design firms and advertising and public relations firms just to name a few
The professional scientific and technical services sector also includes architectural engineering and related services (NAICS 5413) and specialized design services (NAICS 5414) two industry groups that commonly employ industrial designers In turn architectural engineering and related services contain architectural services businesses engineering services firms and drafting businesses among others Specialized design services is the parent group to industrial design firms fashion design houses graphic design businesses and companies selling ldquoother specialized design servicesrdquo such as jewelry design
Within the NAICS structure business establishments are assigned an industry code based on the production or service accounting for the largest share of the establishmentrsquos sales or revenue As discussed in this report in 2007 148 industrial design firms (out of a total of 1637) did $37 million in graphic design business But these establishments were classified as industrial design firmsmdashthe majority of their sales stemmed from product design and other industrial design services
Illustration of NAICS Structure
NAICS Hierarchy Sector industry group and industry
54 Industry sector Professional scientific and technical services
5414 Industry group Specialized design services
54141 Industry Interior design services
54142 Industry Industrial design services
54143 Industry Graphic design services
54149 Industry Other specialized design services
5413 Industry group Architectural engineering and related services
54131 Industry Architectural services
54132 Industry Landscape architectural services
54133 Industry Engineering services
54134 Industry Drafting services
54135 Industry Building inspection services
54136 Industry Geophysical surveying and mapping services
54138 Industry Testing laboratories
Source US Census Bureau US Department of Commerce
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 49
References Andes S and Muro M (2013) Jobs Alone Do Note Explain the Importance of Manufacturing Advanced Industry Series The Brookings Institution Retrieved from httpwwwbrookingsedublogsthe-avenueposts2013 0403-jobs-manufacturing-muro-andes
Babcock C (2012 September 6) ldquoApple Beats Competition with Design ndash And Design Patentsrdquo InformationWeek Retrieved from httpwwwinformationweekcomhardwarehandheldapple-beats-competition-with-design-and 240006830pgno=1
Bailey MN and Manyika J (2013 January 21) ldquoIs Manufacturing lsquoCoolrsquo Againrdquo Brookings Institution Retrieved from httpwwwbrookingseduresearchopinions20130121-manufacturing-baily-manyika
Brookings Institution (2012 May 10) The Arts New Growth Theory and Economic Development Symposium Retrieved from httpwwwbrookingseduevents20120510-arts-developmentref-id=20120510_NEA_Panel_1
DuMont J amp Janis M (2012) Designing the American Design Patent System Retrieved from Social Science Research Network website httppapersssrncomsol3paperscfmabstract_id=1862182
Employment and Training Administration US Department of Labor (2011) Advanced Manufacturing Industry Addressing the Workforce Challenges of Americarsquos Advanced Manufacturing Workforce Retrieved from httpwwwdoletagovBRGpdfAdvanced20Manufacturing20Report2011105pdf
Industrial Designers Society of America (IDSA) Women in Design Gallery Retrieved from httpidsaorgwomen-design-gallery
Jones A amp Vascellaro J (2012 July 24) ldquoApple v Samsung The Patent Trial of the Centuryrdquo Wall Street Journal Retrieved from httponlinewsjcomarticleSB10000872396390443295404577543221814648592html
National Center for Education Statistics (2012) Integrated Postsecondary Education Data System Retrieved from httpncesedgovipeds
PBS (Producer) (2006 June 13) ldquoBiography Industrial Designers and Streamlinersrdquo In American Experience Retrieved from httpwwwpbsorgwgbhamericanexperiencefeaturesbiographystreamliners-designers
Richman JH (1991) ldquoDesign Protection and the New Technologies The United States Experience in a Transitional Perspectiverdquo Baltimore Law Review 19 Retrieved from Duke University School of Law website httpscholarshiplawdukeeducgiviewcontentcgiarticle=2229ampcontext=faculty_scholarship
The Manufacturing Institute (2013) Facts About Manufacturing Retrieved from httpwwwthemanufacturinginstituteorgResearchFacts-About-ManufacturingFacts-2012aspx
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
50 | References
US Bureau of Labor Statistics (2012) 2012ndash2013 Occupational Outlook Handbook Retrieved from httpwwwblsgovooh
US Bureau of Labor Statistics (2012) Employment Projections 2010ndash2020 Retrieved from httpwwwblsgovemp
US Bureau of Labor Statistics (2013) Labor Force Statistics from the Current Population Survey Household Data Annual Averages Retrieved from httpwwwblsgovcpscpsaat12htm
US Bureau of Labor Statistics (2013) Occupational Employment Statistics Overview Retrieved from httpwwwblsgovoesoes_emphtm
US Patent and Trademark Office (2013) Design Patenting by Geographic Region (State and Country) Breakout by Organization North Carolina Retrieved from httpwwwusptogovwebofficesacidooeiptafdstcasgnc_drorhtm
US Patent and Trademark Office (2012) Design Patent Application Guide Retrieved from httpwwwusptogovpatentsresourcestypesdesignappjsp
US Patent and Trademark Office (2013) Design Patents Report Parts A1 A2 B Retrieved from httpwwwusptogovwebofficesacidooeiptafdatadesignhtmPartA1_1
US Patent and Trademark Office (2013) US Patent Activity Calendar Years 1790 to the Present Retrieved from httpwwwusptogovwebofficesacidooeiptafh_countshtm
Additional ReadingArt Center College of Design Retrieved from httpwwwartcenteredu
Car Body Design (2012 June 18) ldquo85 Years of GM Design The Timelinerdquo Retrieved from httpwwwcarbodydesigncom201206gm-design-the-timeline
Employment and Training Administration US Department of Labor ONet Online Retrieved from httpwwwonetonlineorg
Guglielmo C (2012 July 31) ldquoApple Goal with iPhone Was to lsquoWow the Worldrsquo Not be lsquoRipped Offrsquo by Samsungrdquo Forbes Retrieved from httpwwwforbescomsitesconnieguglielmo20120731apples-witnesses-take-the-stand-in-patent-trial- with-samsung-live-blog
Henderson R (2012) ldquoIndustry Employment and Output Projections to 2020rdquo Monthly Labor Review Retrieved from httpwwwblsgovopubmlr201201art4fullpdf
Knoble J (1993 June) ldquoDonrsquot Overlook Design Patentsrdquo Design News
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Valuing the Art of Industrial Design | 51
Langinier C amp Moschini G (2002 February) The Economics of Patents An Overview Working Paper 02-WP 293 Center for Agricultural and Rural Development Iowa State University Retrieved from httpwwwcardiastateedupublicationsDBSPDFFiles02wp293pdf
Oake R (2011 October) ldquoUnderstanding Functionality in Design Patent Lawrdquo Intellectual Property Today Retrieved from httpwwwdesignpatentschoolcomassetsOake_OCT1120V2pdf
Rothwell J Lobo J Strumsky D amp Muro M (2013) Patenting Prosperity Invention and Economic Performance in the United States and its Metropolitan Areas Metropolitan Policy Program at Brookings Brookings Institution Retrieved from httpwwwbrookingseduresearchinteractives2013metropatenting
Stanford Program in Law Science and Technology (2013 April 5) Design Patents in the Modern World Conference Retrieved from httpwwwlawstanfordeduevent20130405design-patents-in-the-modern-world-conference
US Census Bureau Service Annual Survey Overview Retrieved from httpwwwcensusgovservicessasabout_the_surveyshtml
US Census Bureau (2013 April 30) ldquoUS Businesses Show First Rise in Employment Since 2008 Led by Mining Sectorrdquo Newsroom Retrieved from httpwwwcensusgovnewsroomreleasesarchivescounty_business_patternscb13-75html
World Intellectual Property Organization About Industrial Designs Retrieved from httpwwwwipointdesignsenabout_idhtmlprotect
World Intellectual Property Organization (2010) World Intellectual Property Indicators Retrieved from httpwwwwipointexportsiteswwwfreepublicationsenintproperty941wipo_pub_941_2010pdf
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
Prototype for a domestic electric space heater designed by Bill Moggridge 1973 Photo courtesy of Smithsonian Cooper-Hewitt National Design Museum from its permanent collection
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov
National Endowment for the Arts 1100 Pennsylvania Ave NW Washington DC 20506-0001 (202) 682-5400
Not for sale Available for free at artsgov